Earl Attlee: My Lords, I thank the Minister for that reply. Does she agree that the system of SOSREP, the Secretary of State's representative, proposedby the late Lord Donaldson and implemented successfully by this Government, has worked well in this incident and many others? Will she take stepsto ensure that the role of the SOSREP is not downgraded? What progress has been made in recruiting Mr Middleton's successor?

Baroness Crawley: Yes, my Lords, the SOSREP has been a highly successful appointment. As the noble Earl, Lord Attlee, will know, that post will not become vacant until the autumn. The Government are seeking a suitable candidate with the necessary skills and experience to fulfil this role. It is a very important role, because the SOSREP makes decisions at the scene of the accident with the full powers ofthe Secretary of State. The salary has been a matter of some contention and is under review. No appointment will be made until the right individual is identified.

Baroness Crawley: Yes, my Lords, we all remember unruly scenes on Branscombe beach. The law states that anyone finding or taking possession of wreck material, regardless of its size or value, must report that to the Receiver of Wreck. Failure to report is a criminal offence. Two reviews are taking place, one into the accident itself and the other into the aspects of the accident that the noble Baroness raised.The Maritime and Coastguard Agency is actively reviewing its procedures and the effectiveness of existing legislation. Is the legislation adequate given the quick information routes of the 21st century—including mobile phones, the internet and so on—and as regards the powers of the police and other bodies?

Lord Drayson: My Lords, there is a misunderstanding of the difference between situational awareness and battlefield target identification. The Bowman system is intended to give situational awareness of our forces on operations. It does not tell our forces whether they are friends or foe, as an IFF system would with an aircraft. Therefore, it is not the Bowman system but the fielding of the battlefield target identification system—a different system—that is key here. With regard to the statistics that the noble Lord quoted, again, I believe that he is confusing cases of fratricide, in which there is a failure to identify the enemy properly, and deaths caused by soldiers moving into the lineof fire or a ricochet. No cases of fratricide—wrong targeting—have been suffered or perpetrated by United Kingdom forces since March 2003.

Lord Drayson: My Lords, I am quite happy to address delays caused by poor management of a project in the Ministry of Defence but I do not think that that is the case here. There is a difference between identifying as friend or foe a civilian, a military aircraft or a ship at sea and identifying a friend orfoe on land. As the House will recognise, the landis a cluttered environment with very many more targets and there are often obstructions with ground being hidden. Putting an IFF system into a land environment is a major technological challengeand there have therefore been delays in reaching international agreement on the standards. However, such a system will work only if all coalition partners buy into a common standard. The noble Lord is correct: it took a considerable time for the United States to make a decision. It decided last year to adopt the NATO standard, and we now have a programme that can exploit that agreement. I do not believe that the SRO lacks the necessary controls or influence over the project. He has the necessary controls. I discussed a project with him this morning and he feels that he has everything that he needs to manage this project effectively.

Lord Astor of Hever: My Lords, from these Benches we join the Minister in sending condolences to the families of the two corporals and the guardsman whom he mentioned. In the light of the Minister's last response and the criticism fromthe Public Accounts Committee in the Commons, will the Government consider an interim programme for the battlefield target identification system?

Lord Dykes: asked Her Majesty's Government:
	When they next plan to meet the Governmentof France to discuss European Union issues of mutual interest.

Lord Dykes: My Lords, I thank the Minister for that answer. In the press interviews that President Sarkozy gave recently, he expressed the hope thatthe incoming British Prime Minister would be a very good European and strong and positive on leading European issues. Will the Minister confirm that the new Premier Gordon Brown will be constructive and bold on European issues? In the context of boldness, what would the Minister outline as the leading salient issues where, when he gets the opportunity after the summit at the end of June, Gordon Brown could be constructive and bold, such as QMV, for example?

Lord Triesman: My Lords, I was trying to think of an occasion when we did not agree with the French in the past 100 years. It is hard to recall, but we disagreed with them rather more in previous centuries.
	There is no doubt that we are improving our work on Africa now, and it will continue to improve. Weare seeing much more openness in discussions on Somalia, Darfur and other very troubled regions. That will be one of the purposes that I shall pursue in Paris on 18 June.

Viscount Falkland: My Lords, the Minister mentioned enlargement. Can he say what the attitude is towards Turkey joining the European Union?Mr Sarkozy is on record as being doubtful about the wisdom of supporting Turkey, and we differ somewhat in that view.

Baroness Amos: My Lords, we are concerned about the increasing number of people displaced by the Iraq conflict.The Department for International Developmenthas provided £10 million to assist internally and externally displaced Iraqis and other vulnerable groups in 2007. That includes a contribution of £1.5 million to the appeal by the UN High Commissioner for Refugees to address the influx of displaced Iraqis into neighbouring countries.

Lord Fowler: My Lords, I welcome that contribution, but is it not a fact that around 4 million Iraqis have been displaced by the conflict there, including 2 million who are refugees in neighbouring countries such as Syria and Jordan? Given the scaleof this human crisis and given that since the beginning of the conflict spending by Britain on military operations has been over £5 billion, does the Minister believe that we are doing enough to help those who have been made refugees?

Baroness Northover: My Lords, should not the UK, with the United States, take far greater responsibility for the refugees now desperately trying to flee Iraq—those who can get out? Does the Ministerthink that the amount that she mentioned, which is one-60th of what the UNHCR is asking for, is likely in any way to prevent instability in the region? Why have the 100 or so Iraqis who have left that country and fled to Syria and Jordan who fear for their lives because they helped the British forces not been given asylum?

Baroness Amos: My Lords, one of our responsibilities towards neighbouring countries is to try to lessen the tension that has been building up in them as a result of refugees fleeing into them. Jordan remains very important in that regard, and we will continue to talk to it, to Kuwait and to other countries in the region. The Home Office must try to get the balance right between having a system thatis robust but that can take on board the many different circumstances that exist in different partsof the world. That is why it works with up-to-date, country-specific data, to enable it to take the right decisions in these cases.

Baroness Anelay of St Johns: My amendment would require the Secretary of State to publish a report setting out his reasons for believing that the time was right to expose the core offender management tasks, such as writing court reports, to the new process of contestability, which lies at the heart of the Bill.It would do so by applying the super-affirmative procedure to the statutory instrument that would remove Clause 4. Noble Lords—at least those who have been involved in the Bill—will recall thatClause 4 prevents the Secretary of State from opening up core offender management work to contestability. That protection, however, can be whisked away by a statutory instrument laid under the powers given to the Secretary of State in Clause 12.
	The Government have said that they will not expose services such as the writing of court reports to contestability until they are sure that the time is right to do so, or at least for the next three years. The Committee has debated Clauses 4 and 12 in some detail and has set out its considerable concerns about how they will operate. Indeed, the greater part of our debates in the first four days of Committee on the Bill has been dominated by the concerns of noble Lords about the way in which the Government intend to push ahead with their policy of contestability without first being adequately clear about its operation. My Amendment No. 99 has been proposed to find a way forward that may satisfy all sides of the debate. We believe that only the process recognised by the Delegated Powers and Regulatory Reform Committee as being the most stringent secondary legislation mechanism available should be used to remove the protection for core services in Clause 4.
	So how would the amendment work and why do we think that it is right for this Bill? If the Secretary of State wished to bring forward a statutory instrument to remove Clause 4, under my amendment he would first have to publish a report containing his proposals and giving his reasons for them. The report would have to set out why the Secretary of State believed that the time was right and it would have to give details of what had happened so far in exposing other non-core work to contestability, to enable the House to judge whether the time was right to let Clause 4 wither and die. The report would be laid before Parliament and both Houses would be required to approve it before the statutory instrument could proceed.
	Effectively, the amendment would give this House what it so often calls for; that is, the opportunityto have an amendable statutory instrument. That would be superior to the existing position whereby instruments can be only accepted or rejected. Members of the Committee will be aware of how cautious I always am with regard to statutory instruments and how cautious noble Lords are generally. We have one recent example of a statutory instrument being rejected—the casinos statutory instrument. It was an extraordinary occasion; I think that it was only the second time in living memory that the House has rejected a statutory instrument. That course of action is taken very seriously and not lightly. If Members of the Committee check the list, they will see that I did not vote on that occasion. The Opposition were not whipped to vote. I followed the line that I always do; that is, if this House has given its approval to the primary legislation, it is a matter of great concern if we are in the position of having to vote against secondary legislation. It is not a matter in which I would wish to take part, except as a very last resort.
	Why is this procedure right for this Bill? I believe that it is a way forward that would resolve some of the major concerns about the Bill as a whole. It is of course a novel procedure. The Government first tried to introduce it during the passage of the Identity Cards Act. At that stage, I objected to its use on two grounds, both of which can be ignored for the purposes of this Bill. First, I said that the procedure was wrong for a change of constitutional significance to the liberty of every citizen, as the change to all-out compulsion for ID cards in the Identity Cards Act would be. Secondly, I did not believe that the Government were serious about abiding by the implications of the process of the super-affirmative procedure. My suspicions were based on comments made by the Minister in another place, Mr Andy Burnham, who effectively said, "Well, it does not really matter what the House of Lords do. We will have supremacy anyway, so it is not really an amendable regulation".
	The first matter does not apply here, so this is not the wrong process for this Bill. My second objection was resolved clearly by the noble Baroness, Lady Scotland, in this House. I am grateful to her for her clear assurance at Report stage of the Identity Cards Bill on 23 January 2006, at cols. 990-94. She made it clear that, if this House did not agree to an amended form of a statutory instrument under the super-affirmative procedure, the only way forward for the Government would be by primary legislation. Shedid the House a service for the future by making that so clear.
	I believe that the limitation in Clause 4 is fundamental, as I made clear at Second Reading and in Committee. It is a matter of policy, as paragraph 28 of the report from the Delegated Powers and Regulatory Reform Committee observed. For a matter as fundamental to the Bill as the limitation in Clause 4 and the allied proposals in Clause 12, the super-affirmative procedure would be the appropriate course to take. I hope that the Minister will agree and will accept the amendment. I beg to move.

Baroness Turner of Camden: I understand that Napo supports this amendment. As has been said, Clause 4 exempts court work from the threat of contracting out. Napo fully supports this clause and believes that there would be a conflict of interest should the private sector be involved in giving information to the court. Currently, the Probation Service provides nearly 200,000 reports for the courts, including pre-sentencing reports and fast-track reports, which are normally provided on the day. It seems essential that the Government should ensure that there is no conflict of interest.
	The super-affirmative resolution would provide a number of safeguards to ensure that the exclusion of court work could not be reversed merely by statutory instrument. The main safeguards would be that a draft of the order would have to be laid before each House and a report containing the proposal would be published. The Secretary of State would have to give reasons for the proposal and the report wouldhave to be approved by each House. I support the amendment.

Baroness Linklater of Butterstone: As has been stated on many occasions during our debates in Committee, the restriction of court work to the Probation Service is important and necessary. Among other matters, there is a potential conflict of interest. Just to rehearse that argument, should a person be giving information or advice to the court on, say, tagging when he works for a company involved in the provision of electronic tagging equipment, there would be a clear conflict of interest, which would be challengeable under Section 6 of the Human Rights Act. Since the Probation Service currently provides nearly 200,000 reports annually for the courts, it is clearly essential that the Government should ensure that there is no such conflict.
	Given the importance that we have attached, in all our discussions on the Bill, to the restriction of this area of work to the Probation Service, Clause 4 should not, as the noble Baroness, Lady Anelay, said, be able to be repealed by the Secretary of State without that first being given the fullest consideration and debate in both Houses of Parliament. Indeed, it is no wonder that there has been so much concern about the way in which the Bill and its provisions are presented out there in the community at large when the powers of the Secretary of State are such that he can give with one hand and take away with the other by statutory instrument under one of the shortest clauses of the Bill.
	We therefore particularly support the introduction of the super-affirmative resolution procedure, with its safeguards, to ensure that the exclusion of court work is not reversed merely by statutory instrument. The safeguards are that a draft order would have to belaid before each House, the report containing the proposals would have to be published, the Secretary of State would have to give reasons for the proposal, and the report would have to be approved by each House. Anything less would simply not be acceptable.

Lord Dholakia: I do not want to add to the arguments that have been advanced. However, can the Minister confirm whether the judiciary and the legal professions have been consulted about this matterand whether they indicated any potential conflictof interest? Is there likely to be any problems interms of membership of the judiciary on a probation board or probation trust?

Lord Bassam of Brighton: We have had a number of discussions on and around this issue over the past few weeks as we have worked our way through theBill in Committee. For many noble Lords, this is understandably a core issue, which is fundamental to their appreciation and understanding of the direction of travel that this piece of legislation represents. Itis an interesting discussion and debate for all that, because, when it comes down to it, the noble Baroness, Lady Anelay, has put on the record quite clearly that she has no,
	"philosophical or political objection to probation services being provided from outside the existing public provision".—[Official Report, 21/5/07; col. 552.]
	However, she has said that she has some serious doubts about the process. In essence, that is what we have come down to—some doubts about the process. Both major parties represented in your Lordships' House are at one on the importance of contestability, but my noble friend Lady Scotland and I disagree with the noble Baroness, Lady Anelay, about some aspects of the process. It is in that area that I would like to offer some reassurance in the next few minutes.
	Last week, when we considered Clause 4 and the noble Lord, Lord Ramsbotham, put forward his amendments, we had a constructive discussion about this issue. We have moved forward and there is now a broader understanding in the Committee about how the contestability process will work. However, we now have an opportunity to pull the various strands of that debate together.
	Before I focus on the amendment, it may help if I remind the Committee of the history of Clauses 4 and 12 and how they came to be in the Bill in its current form. When the Bill was first introduced, it did not distinguish between different aspects of Probation Service provision in terms of what could and could not be delivered by non-public sector organisations. That is because we do not think that there are fundamental reasons of principle why any aspect of probation provision could not in theory be delivered outside what we strictly understand as being the public sector. As I have rehearsed, that is a view shared by the Benches opposite. However, the Bill sets out a framework for the longer term, and we have always said that we will move forward cautiously and at a sensible pace. I think that noble Lords have accepted that argument. We understand the risks and sensitivities involved, particularly those that have been raised by noble friends behind me.
	As noble Lords will know, the work that probation does with offenders can be divided into two broad categories: offender management and interventions. To remind ourselves further, "offender management" refers to the management of individual cases. It isthe process of assessment and sentence planning, implementation, review and evaluation that runs from the beginning to the end of an offender's sentence. Interventions are structured or planned pieces of work identified in the sentence plan. Their purpose may be punishment, rehabilitation or public protection. Examples include accredited offending behaviour programmes such as those for sex offenders and domestic violence offenders, or curfews with electronic monitoring and unpaid work.
	It is in the field of interventions where alternative providers have achieved the greatest level of involvement, and there has been much support for that. We want to build on that and increase their involvement, working alongside the public sector, to develop expertise and strengthen partnerships so that a more diverse range of provision is available in due course. In respect of the core offender management work, however, we have always said that we want to proceed much more cautiously because we do not think that alternative providers yet have the necessary expertise or experience to undertake that work. We subsequently firmed up that reassurance into a commitment given in the other place that we would not contract with a non-public sector provider for that area of work until 2010 at the earliest.
	As the Bill approached Report and Third Reading in the other place, it was apparent that particular concerns remained in respect of one aspect of offender management; namely, the work that probation does in relation to courts. We responded to those concerns by tabling an amendment to the Bill that enables the Secretary of State to contract only with a public sector provider for the work that probation does in relation to courts. That amendment was passed unopposed and now forms Clause 4 of the Bill. It was coupled with what is now Clause 12 of the Bill, which enables the restriction to be lifted by means of an order subject to affirmative resolution.
	Why do we think that such a power is needed? As I have made clear, we see no reason of principle why this or any other aspect of probation work should be reserved for the public sector alone. But the fact that we do not think it appropriate to open up this area to other providers now does not mean that we should rule out the possibility for all time. If we reach a stage where alternative providers have gained greater expertise and experience, where courts have full confidence in their abilities and where concernsabout conflicts of interest have been addressed, the Government of the day may well wish to open up this area of work to competition to see whether it canbe delivered more effectively by a non-public sector provider. We should have the flexibility to respond to those changed circumstances without having to wait for a suitable slot in primary legislation.
	In that context, it is worth highlighting the fact that the court restriction is cast widely and covers much more than the specialist area of court reports and advice on sentencing. It also covers, for example, the provision of general advice and bail information. It may very well make sense for some of those less sensitive aspects of delivery to be opened up to other providers more quickly, which is why Clause 12(2) allows for Clause 4 to be repealed partially as well as in its entirety. We should not deny this or a future Government such flexibility, but we should attach to it an important safeguard in the form of the affirmative resolution procedure. That means that the Government could not lift the restriction without a vote to that effect in each House.
	For a sensitive measure such as this, that is setting the bar high. The Government would need to present a convincing and effective case, backed with evidence, if they were to secure the support of both Houses, particularly this one. The Government currently have no majority here and the House can effectively operate a veto. That is a robust safeguard, and I believe that it is the right approach for an order of this importance.
	I was glad that the Delegated Powers and Regulatory Reform Committee agreed that this procedure was appropriate. The noble Lady, Baroness Anelay, however, does not agree with either the Government or the Delegated Powers Committee—an unusual point, as it says.

Lord Bassam of Brighton: I understand how the Delegated Powers and Regulatory Reform Committee works. My point is simply this: that committee agreed with the Government's interpretation of what was required in terms of process and procedure. It did not suggest that the super-affirmative process was appropriate for dealing with this issue.
	In that context, the amendment goes much further than the normal tried-and-tested procedures and seeks to apply a super-affirmative procedure. It seeks, in so doing, to impose an unnecessary delay by specifying that a draft order must be laid for at least 60 days before both Houses may debate the order. Further, it seeks to impose on both Houses by requiring them to approve a report that sets out what will be in the draft order. Both Houses would then be required to approve the same proposals, in the same Session, as set out in the order.
	As the noble Baroness has conceded, the amendment was inspired, perhaps in her mind, by the super-affirmative resolution procedure set out in Section 18 of the Legislative and Regulatory Reform Act 2006, which is in many respects similar to the power proposed here. But the circumstances for which the super-affirmative power in the 2006 Act was designed bear no resemblance to the circumstances that we are dealing with here.
	The Legislative and Regulatory Reform Act 2006, which I had the privilege of taking through your Lordships' House, enables the Government to use secondary legislation to amend retrospectively primary legislation that made no provision for such amendment when it was passed by Parliament in the first place. It was designed for a different purpose altogether.
	To reflect the wide-ranging nature of this power and to provide appropriate safeguards, the Act therefore followed the super-affirmative procedure first developed under the Regulatory Reform Act 2001, repealed by the later Act, which operates along the sort of lines set out in the amendment. Our situation is entirely different. Whereas the 2006 Act introduced powers to amend primary legislation for purposes that were not envisaged at the time that that legislation was passed, our intentions are open and clear. Indeed, this is the very purpose of Clause 12: to provide an order-making power to enable the subsequent repeal, in whole or in part, of Clause 4. So a super-affirmative procedure is quite inappropriate here. Indeed, it is ironic that a procedure that was intended to facilitate deregulation and the lifting of burdens should here be used with the aim of maintaining them.
	I ask the Committee to think carefully about the implications of applying this procedure in circumstances that are so different from the ones that it was originally designed for. Quite aside from its impact on the probation provisions, it could set a most unhelpful precedent more widely and risk undermining the clear and well understood parliamentary procedures that have stood the test of time. Before noble Lords consider this further, I ask them to reflect carefully.
	Under the normal affirmative procedure, the order will be laid in draft before both Houses, and the Government will be required to make their case to both Houses before the order can be made. When Ministers come to do so, they will need to fulfil the commitments that have been made during this Bill's passage through both Houses: to demonstrate that the appropriate safeguards are in place to alleviate the concerns expressed during that passage; and to present evidence as to how the new arrangementsare working in practice. In fact, my right honourable friend the Home Secretary gave just such an undertaking during the Third Reading debate in another place.
	Whether a formal report is the best vehicle for doing so is a judgment that will need to be taken at that time, taking into account the specific circumstances under which the draft order has been laid before both Houses. It is not something that can be rigidly codified in advance, in ignorance of those circumstances or, indeed, of what the exactly the Government propose in the order. The bottom line is that, if either House is not satisfied with the case that the Government bring to the House at that time, it will not support the order and the restriction will not be lifted.
	This has been a valuable debate and has provided an opportunity to pull together a number of important issues, in particular the issue of conflict of interest. We do not believe that there is an intrinsic conflict of interest for private companies in writing pre-sentence reports, which is undoubtedly one of the issues that troubles noble Lords. The writing of reports will be done under the very strict guidelines already in place to prevent any similar potential conflicts of interest under current arrangements, when the local board is in the position of both advising on and implementing the sentences of the court. However, we recognise that we have to get the system right before opening up this sensitive area of work to other sectors. That is why we have added this clause to the Bill. In any case, the awarding of a sentence—that being an issue raised in this context—will remain entirely at the discretion of the sentencer.
	The noble Lord, Lord Dholakia, asked whether there had been consultation with the judiciary. There has been very wide consultation on the probation proposals. It is partly in recognition of the concerns about conflicts of interest that Clause 4 was inserted in the first instance.
	We are clear on this. We believe that we have a robust procedure that is tried and tested. It will inevitably mean that we must bring forward and carefully explain to both Houses the basis of our decision to move forward in the contestability field. The noble Baroness has drawn together in essence a procedure designed for an entirely different purpose, under legislation intended broadly speaking to deregulate rather than over-regulate. I invite the Committee to consider its position carefully before it decides to agree or take on board the proposal made in the amendment. I hope that, having heard what I have said, the noble Baroness will feel able to withdraw her amendment.

Lord Dholakia: I asked the Minister a specific question and the Minister replied that there hadbeen wide consultation. Were the judiciary and legal profession involved in this consultation?

Baroness Anelay of St Johns: I begin by knocking on the head the allegation that the Minister makes that somehow I am abusing a parliamentary process. That is what he is suggesting, in very fancy words.
	The Government have chosen to cite one piece of legislation—the Legislative and Regulatory Reform Act 2006—but they have themselves adapted the super-affirmative procedure to suit their own ends in other Acts, including the Civil Contingencies Act 2004 and the ID Cards Bill, in which an amendment was included to that effect until they decided to accede to the request of noble Lords that, instead of any kind of affirmative instrument, there shouldbe primary legislation. So we should not let the Government hide behind an allegation that the Committee will be veering off in a new direction. Parliamentary procedure should be flexible enough to meet the needs of democracy and the way in which the legislative works; it should not just be flexible for the Government to have the power to exercise their own authority.
	In this case the issue is simple and I am grateful indeed to all noble Lords who spoke in favour of the amendment. The way in which Clause 4 should be removed is fundamental to the Bill, because the provision gives core protection to the core management work. The Minister says that over the past couple of weeks we have got a greater understanding of how contestability will work. No, we have not; much still remains hidden and uncertain. He is right to say that I have no objection in principle to contestability. My problem is with process, and it comes to a head with putting forward this amendment as a way of trying to resolve the problem that I have with process. He says that the affirmative procedure, by which we can merely reject or accept, sets the bar high enough. It is not high enough for something that, as the right reverend Prelate the Bishop of Chester said, is a matter of judgment on right and wrong. On this matter, I wish to test of the opinion of the Committee.

On Question, Whether the said amendment(No. 99) shall be agreed to?
	Their Lordships divided: Contents, 170; Not-Contents, 125.

Baroness Amos: My Lords, with the leave of the House, I would like to repeat a Statement made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
	"With your permission, Mr Speaker, I would like to make a Statement on the G8 Summit, which took place between 6 and 8 June in Heiligendamm, in Germany. I pay tribute to Chancellor Merkel's outstanding chairmanship."The purpose of the summit was to take forward the agenda first established at the Gleneagles Summit of 2005 on climate change and Africa. "On climate change, the scale of the challenge, environmentally and politically, has been becoming clearer month by month. There is now a scientific consensus that the planet is warming dangerously. If we do not halt and then reverse the rise in greenhouse gas emissions, we face a potential catastrophe. Sir Nicholas Stern's report has shown that early action will save money; late action will cost it. So, for the environment, this is urgent."Politically, the problem has been clear but daunting. The United States was not part of the Kyoto treaty. The major emitters in the years to come will include China, India and developing nations. They want to grow their economies. They fear that action on climate change will limit their growth and hence keep their people—hundreds of millions of them—poor."Added to all this, Kyoto barely stabilises emissions—it is now obvious that we need substantially to cut them—and it expires in 2012."At Gleneagles, we set up the G8 plus 5 dialogue, the first time the US and China sat round the same table debating how to put a new deal together."There is still a long way to go, but for the first time an outline agreement can be seen that meets the environmental test of cutting substantially the harmful emissions and the political test of bringing developed and developing nations, notably America and China, together."We agreed at the G8, for the first time, thata new global climate change agreement should succeed the current Kyoto treaty."We agreed, for the first time, that at the heart of that agreement should be a substantial cutin global emissions. And the summit sent an important signal that the global target should be of the order of a cut of at least 50 per cent in greenhouse gas emissions by 2050, the target set by the EU, Japan and Canada."We agreed at the G8, for the first time, the process for such a new agreement. We agreed that the UN is the only body able to finalise a global deal on climate change and that a comprehensive agreement should be reached in 2009. We calledon all countries to see the UN climate change meeting in December as a first step to achieving a comprehensive climate change agreement."The most important change was the position of the United States of America. Again, for the first time, President Bush signalled that he wanted the US to be part of the new global agreement and would lead the attempt to get consensus among all the main countries, including China and India, so that that consensus could shape the final global deal. "This is crucial. There will be no effective climate change accord without the US. The US will not agree without China being part of it. Now we have an agreement in principle, a goal and a process to achieve it. Much remains to be done; but on any basis, this is a substantial step forward. "We agreed that tackling climate change and addressing energy security are complementary goals. We highlighted the importance of tackling energy efficiency, addressing emissions caused by deforestation and helping developing countries, which are likely to be worst hit by climate change, to adapt to its impacts. We agreed on a renewed effort to develop and deploy new low-carbon technologies, and we have sent a strong message that emissions trading schemes, within and between countries, will play a key role in giving incentives to business to invest in low-carbon technologies."Heiligendamm was never going to be about finalising a deal; it was about sending a clear signal on the shape of the post-2012 climate change framework. That is exactly what it did. The UK will work hard in the G8, UN and elsewhereto deliver this objective of such fundamental importance to the future of the world. "Two years ago, the Gleneagles G8 agreed a global increase in aid and debt relief of $50 billion by 2010, with $25 billion extra for Africa. It also agreed universal access to HIV/AIDS treatmentby 2010, to tackling other killer diseases, a commitment to funding primary education, to supporting an African peacekeeping force and to a big debt write-off."Britain is already meeting its commitment to increase aid to Africa. We have trebled it. Before the summit, Germany announced an extra €3 billion over four years, and America an extra $15 billion, for treating HIV/AIDS, over five years. Overall aid has risen. We should not ignore what already has been done or the almost $40 billion additional debt relief for Africa since 2005. But we will need to do substantially more to ensure that the Gleneagles provisions are kept. "However, on HIV/AIDS, the G8 reiteratedits commitment to delivering universal access to HIV/AIDS treatment by 2010. Since Gleneagles, around 1 million people in Africa have been receiving the anti-retroviral drugs that they need; the G8 has now agreed to fund a total of 5 million. This is more than the G8 share of this commitment as predictions currently stand. But we can do more in years to come to fulfil the 2010 goal if the need arises. It committed to providing $60 billion over the next few years in Africa to help to achieve this. It committed to filling the estimated $6 billion to $8 billion shortfall in funding for the global fund to fight HIV/AIDS, and, reflecting UK policy, committed to providing the long-term predictable funding necessary to achieve the fund's goals. "The G8 also committed to taking specific steps to tackle the alarming feminisation of the AIDS epidemic whereby in sub-Saharan Africa 60 per cent of adults living with HIV/AIDS are women and three out of four young people living with HIV are women and girls. So the G8 committed to scaling up its efforts to deliver universal access to services to prevent the transmission of HIV/AIDS from mothers to their children, to paediatric services and to maternal and child health services, at a total cost of nearly $5 billion. "On education, the G8 committed to working to meet the immediate $500 million financing gap for the education fast-track initiative. Again in line with broader UK policy, the G8 committed to help to provide long-term predictable funding to ensure that every child gets to school, and reiterated its commitment to ensure that no country that is seriously committed to education for all will be thwarted in achieving its goal by a lack of resources. This will help to meet the millennium development goal of universal primary education by 2015."The G8 also committed to identifying, agreeing and supporting lasting solutions to the financing of peacekeeping missions in Africa—essential if key missions, such as the African Union mission in Darfur, are not to limp on hand-to-mouth, month after month. "We agreed a strong statement on the crisis in Darfur. The truth is that President Bashir of Sudan has consistently refused to admit a hybrid UN-AU force and that he has consistently moved only under the threat of pressure from outside. Unless he now agrees to the G8 and UN demands, we are now committed to a new and tougher package of sanctions through the Security Council to force him to do so. "Our last session was dominated by discussion of the World Trade talks. The gap has now narrowed. There is the real possibility of agreeing an outline deal by the end of June. The outstanding elements amount to only a few percentage points either way. We are therefore closer to the headline numbers than ever before. But we have to move from wanting to do the deal to doing it. The meeting of the G4 between 19 and 23 June will be absolutely crucial. Britain will continue to do all we can—and we have done much over these past months—to bridge the gap. The benefits of an agreement for the wealthy nations,as well as the developing ones, are enormous. It would be good for business and jobs, good for the multilateral system and good for the world's poorest. I urge the US, the EU and the G20 to get this done. It will be great to succeed, a profound shame to fail."As is usual at G8 summits, I also had bilateral meetings with a number of leaders and in particular a long and frank meeting with President Putin covering the range of issues presently under discussion: the Litvinenko case, Kosovo, ballistic missile defence and energy policy. I set out our view that people were becoming worried and fearful about the implications of present Russian policy. The president set out with equal frankness his views. "It was right to have such an exchange. The issues were aired with complete openness onboth sides. I said to him that we wanted a good relationship with Russia. He affirmed his desire to see Russia/UK relations strong. But the truth is that these issues remain unresolved. "So this was a summit that made a real breakthrough on climate change and some more progress on Africa, and it showed once again the value to Britain of its transatlantic and European alliances. I commend the outcome to the House".
	My Lords, that concludes the Statement.

Lord Strathclyde: My Lords, I am immensely grateful to the noble Baroness for repeating this Statement. The summit opened, again, with scenes of organised violence and disruption, which is much to be regretted. Again, the active anti-global elements were extremely well organised.
	As for the main issues under discussion at the summit, significant process on climate change has been claimed. It is interesting that the G8 appeared to look beyond the Kyoto treaty, which until now has been seen as the litmus test for commitment on this front. That must be a stimulus to renewed progress, not stagnation. It is worrying that no firm agreements were reached. However, did the noble Baroness note a reduction in CO2 emissions reported by the United States last year and the positive commitment made by the US Administration at this summit? A positive attitude is to be encouraged. Does she share my belief that this may well have resulted from the relationship between the Prime Minister and President Bush and that the Prime Minister should be congratulated? Clearly, the involvement of India and China is vital, but does she agree that the goal must now be a full successor to the Kyoto treaty, involving not onlythe US but also India and China and other future super-economies, with binding targets and real progress being made at the UN's December conference in Indonesia?
	I welcome another aspect of the communiqué; namely, that we must treat causes as well as symptoms and that much more needs to be done to develop energy-efficient technologies. I wonder how much the UK Government are investing here.
	Furthermore, destruction of the world's forestsis responsible for a fifth of carbon emissions—even more than transport. Does the noble Baroness therefore share my disappointment that more was not achieved on that?
	On AIDS and the fight against disease, is the noble Baroness surprised by the somewhat negative reaction to progress in an area where the Prime Minister has striven so hard? Is Oxfam right to estimate that the total annual increase in spending amounts to just$3 billion? If so, and if this is a largely recycled announcement, that might go some way to explain that reaction.
	Britain has made substantial progress on overseas aid. I congratulate the Prime Minister and the noble Baroness on this. My right honourable friend David Cameron has today reiterated my party's intention to increase spending on international development to0.7 per cent of GDP by 2013, but can the noble Baroness say what was done at the summit to ensure that all countries deliver what they pledge? There is a fear that, while all countries nod sagely at these summits, too many file the action points in the "pending" tray. Darfur is a tragic example. It is one of Africa's two most pressing humanitarian crises. The G8 statement on Darfur covers important issues, such as an international force and the need for aid toget through. But what is this Government's action programme to ensure that this really will lead to an end of the paralysis that we have seen so far, whenthe Khartoum Government seem utterly unwilling to co-operate with the international community in putting an end to the killing?
	Africa's other humanitarian tragedy is in Zimbabwe. The noble Baroness the Leader of the House will be far more familiar with the voluminous communiqués than I am, but can she explain why, yet again, there is no mention of the atrocious activities of the Mugabe regime in the progress report on the G8-Africa partnership or in the extensive summit declaration of growth and responsibility in Africa? In her speech on 24 May to the Bundestag, Chancellor Merkel had said that Zimbabwe would be dealt with but, in the end, there was nothing.
	The Prime Minister has two more weeks in office. Later this week, he and Mr Brown will discuss the next EU summit, so will the noble Baroness dictatean urgent minute to those two men saying thatthis House demands an end to the international conspiracy of silence on Zimbabwe? Did the G8 discuss the scandal of one of Mugabe's henchmen being awarded a major United Nations development post? The noble Baroness's international credentials are well known but is she not ashamed of the lack of progress in the face of Mugabe's intransigence?
	On security, the situation in the Middle East remains chaotic and troubling. I sensed no new initiative emerging from this summit, but no doubt the noble Baroness can enlighten me if there was. Beyond the Middle East, we welcome measures on nuclear security and counter-terrorism and the strong language on Iran. Was Russia's stance unequivocal on preventing Iran acquiring a nuclear bomb? Did the Prime Minister make any initiative on the question of the planned missile shield, which has caused tension between Russia and her G8 partners?
	Before the summit there was a lot of grandstanding about tough talk with President Putin. While I agree that some of Russia's recent actionsare self-defeating and deserve a frank and robust response, does not the history of international relations suggest that public rhetoric followed by practical inaction is usually counter-productive? Can the Minister tell us one concession that Mr Putin made in the face of the Prime Minister's public finger-wagging? The communiqué showed a sharp division on Kosovo. Where next? Is it the Government's policy to push for early independence for Kosovo, or what?
	The next G8 meets next July in Hokkaido under the flight path of North Korean ballistic missiles.Can the noble Baroness say what actions the British Government will be taking before then to help contain the nuclear ambitions of North Korea?
	This summit was something of a swan-song for the Prime Minister. I am sure that the other G8 leaders will be sad to see him go—maybe they even had a whip-round for him. No one ever span a summit better than this Prime Minister; no one more readily confused rhetoric with achievement; but it would be churlish to let him depart without recognising the Prime Minister's genuine concern in the fields covered by this summit, of global warming, AIDS and Africa, not least. It would be good to think that the outcomes were always as good as he and the noble Baroness tell us, but if progress was made, then in that the Prime Minister played a commendable part.

Lord Wallace of Saltaire: My Lords, we on these Benches also welcome the Statement. There is a vast collection of documents from the presidency andwe could spend three days raising questions, but I promise the Minister that I will not do so. We welcome the now clear establishment of the fact that we are talking about G8 plus five—in particular, the engagement of China as an increasingly important actor in the international economy; it is also becoming an important actor in the world political system. My heart sank when I saw the sheer width of the section on growth and responsibility on the world economy. Some of it is remarkably thin despite the words in it. Since the origin of the G8 was very much to do with managing global financial flows and retaining stability in the international economy, can the Minister tell us what is happening with the Financial Stability Forum and its concerns with the sheer scale of financial flows that carry trade, the role of hedge funds, and so on, which is one of the biggest sources of instability in the global economy that we now have?
	We on these Benches particularly welcome the progress on climate change, although we now recognise that the President of the United States is clearly behind opinion in the United States in his resistance to moving forward rapidly to deal withthis immense problem. We are very happy that the European Union countries continue to provide alead in this sector, and we trust that under the next Prime Minister, as well as under our present one,that collective lead will be sustained. We were disappointed that there was not more outcome on Doha and more pressure to make progress towards a successful completion of the Doha development round, but there was a great deal else on Africa, some of which is clearly a good step forward, but trade is a very important issue as well as aid.
	I will leave Darfur and other questions for others on my Benches, who I hope will be able to add their comments. I want to ask in more detail about the robust exchanges with Russia, which we welcome. The Russians in the Kremlin are now particularly fondof talking robustly and sharply to their neighbours around the world, and it is quite correct that we should reply in the same terms. On Kosovo, we need to move towards a resolution of the situation that is not going to be its remaining part of Serbia. There seems to be some merit in President Sarkozy's suggestion that we should delay this for a further six months—although it would have been helpful if he had informed his co-participants in advance, in accordance with France's deep commitment to common foreign policy within the European Union.
	The British Government have clearly been engaged in conversation with the Americans on missile defence for a considerable period. I was asking Questions in this House about the updating of Fylingdales radarin 2000 and 2001, so the British Government mustbe extremely well informed about what is behind American policy. Does the Minister think that the proposals by the Russians on this slightly artificial issue—the missiles are not yet ready or tested—represent some way forward without having an unnecessary confrontation on yet another issue between Russia and the West?

Baroness Amos: My Lords, I thank the noble Lord, Lord Strathclyde, for his positive comments about the role that the Prime Minister played at the summit.On his point about the lack of firm agreements, particularly with respect to climate change, it was not the place for that kind of firm agreement because the serious negotiations will start in December underthe UN umbrella in Bali. We all hope that those negotiations will be concluded some time in 2009 and that the ratification processes can go through the various countries, so that something is in place when Kyoto ends in 2012. The noble Lord is right about the importance of having China, in particular, around the table when we are talking about climate change.
	The noble Lord, Lord Strathclyde, mentioned deforestation. He will know that the World Bank has a forest carbon partnership, and I am happy to write with more details about that. In the United Kingdom, we have an environment transformation fund that includes some elements that will be spent on the issue of deforestation. Again, I am very happy to write on that.
	On HIV/AIDS, it is important that noble Lords remember that the commitment made at Gleneagles two years ago was for universal access to treatmentby 2010, so this is work in progress. What was particularly important about this year's summit was that it focused on implementation. I am very proud that the United Kingdom Government are meeting all our commitments, but we have to do more to put pressure on other G8 Governments who signed up to these commitments in 2005 and reiterated them in 2007. A process is now in place for annual reporting to G8 leaders that will help them to assess the progress being made against the commitments for 2010 and 2015.
	The noble Lord, Lord Strathclyde, is right that we need to do more on Darfur. It is an issue for the global community, which is why the UN Security Council is engaged. A strong statement came out in which the G8 condemned the Government of Sudan's bombings and rebel attacks in Darfur. It called on all sides to implement an immediate ceasefire and called for humanitarian access, commitment to a renewed political process in Darfur and a rapid transition to the AU/UN force. The statement said that if the Government of Sudan and the rebels continue to fail to meet those obligations, they will face action in the UN Security Council. Given that other members of the Security Council were around that table, that was particularly helpful. Noble Lords will know that not all permanent members of the Security Council are in the same place with respect to imposing sanctions.
	Although Zimbabwe was not discussed at theG8 Summit itself, it was discussed by G8 Foreign Ministers at their meeting on 30 May. The chairman's summary of that meeting expresses G8 concern over the deteriorating humanitarian situation in Zimbabwe and called for a constructive dialogue with the participation of all political forces to create the basis for reform and reconciliation.
	The noble Lords, Lord Strathclyde and Lord Wallace of Saltaire, asked me about defence and, in particular, ballistic missiles and the offer fromRussia. President Putin's offer to include the radar in Azerbaijan in the developing ballistic missile system is an interesting and constructive proposal and one that should be considered further. Noble Lords will know that in a Statement on 7 June, the United States said:
	"At this time, we are only discussing the hosting of missile defence assets in the Czech Republic and Poland".
	As my right honourable friend the Prime Minister said in the Statement, he had a long and frank discussion with President Putin but the whole series of issues that they discussed remain unresolved.
	The issue of North Korea needs to continue tobe dealt with under the aegis of the international community.
	The noble Lord, Lord Wallace of Saltaire,also asked me about Kosovo. There was a useful discussion among G8 heads, but there was no breakthrough. The intensive work by the UK and our partners continues, including in New York, on a draft resolution based on the Ahtisari proposals. On the proposal made by President Sarkozy, our priority is to bring the process through to successful completion and his proposals are a useful contribution to achieving that, but we have to consider that in much more detail. We will continue to work with our international partners to reach an acceptable solution to Kosovo's final status.
	I forgot to mention climate change. The noble Lord, Lord Wallace of Saltaire, made a statement about the United States population being ahead of its President on that issue. We have seen the impact that the British population's interest in debt relief and aid to Africa has had in helping to keep the Government on track on our commitments. I very much hope that the fact that President Bush has made commitments to engage in the process between now and the end of Kyoto and the fact that the population of the United States takes the issue of climate change so seriously will mean that the United States can engage in a constructive way in those negotiations.
	On the Financial Stability Forum, the noble Lord will know that those issues are discussed at the G8 Finance Ministers' meeting, but if I can cast any further light on that, I am happy to write to him. I must confess that I have not read the vast collection of documents that came out of the G8 and I commend the noble Lord, Lord Wallace of Saltaire, for having managed to read at least some of them.

Baroness Amos: My Lords, that is not my understanding. I understand that the commitment is that, by 2010, no one will lack access to treatment because of lack of funding. The G8 Governments have said that they will meet any shortfall in funding, such as that to the global fund on HIV/AIDS, to ensure that that commitment is met. There has beena tenfold increase in the number of people on anti-retrovirals in sub-Saharan Africa. The total number is now more than 1 million; that is, 23 per cent of those who need treatment. We have also invested in trying to find an AIDS vaccine. There are a number of different parts to the commitment; the commitment to universal access has not been watered down.

Baroness Northover: My Lords, following on from the question asked by the noble Lord, Lord Fowler, surely the commitment has been halved. Examination of the details shows that universal access by 2010 would have included 10 million to 16 million people. The communiqué talks about 5 million. Even then,it has no concrete timetables, proposals or commitments to get to that point. Surely, therefore, the noble Lord is right that there has been a serious falling-away from what was promised at Gleneagles, rather than a further commitment to it.

Lord Blaker: My Lords, am I right that the German Chancellor said that the conference between the African Union and the European Union will go ahead as planned in December even if Mugabe attends? That would be entirely opposed to the policy stated by Portugal, which will chair that conference. The German Chancellor also said:
	"It cannot be the case that we do not work with a continent just because one country commits unspeakable acts".
	That seems to be a misunderstanding. The European Union is not working against Africa; it is doing an extremely commendable job in helping Africa. Sofar, the European Union has unanimously opposed Mugabe's murderous elite. Chancellor Merkel's policy, if it is her policy, is entirely contrary to what we have said in the past. Has it been agreed with the European Union? Has it been agreed with Her Majesty's Government?

Lord Jay of Ewelme: My Lords, the noble Baroness is right to commend Chancellor Merkel on the outcome of the summit, and the noble Lord, Lord Strathclyde, is right to commend the Prime Minister on his efforts over the past two years in helpingto bring about the outcome at Gleneagles and Heiligendamm. I particularly welcome the progress on climate change, due partly to a move by the United States but also by the presence at Heiligendamm of the representatives of China and India. Can the Minister say whether, even if there is not to be a G13 in the future, it is inconceivable now that there could be a G8 summit dealing with the big global issues that does not include at least China and India?
	I also welcome the progress on aid to Africa, but it is only a small step along a long road. Could the noble Baroness also confirm that the Government will continue to put strong pressure on other Governments to fulfil the aid commitments agreed at the Gleneagles summit?

Baroness Amos: My Lords, the noble Baronessmay be aware that there are ongoing discussions with China on Darfur, partly under the UN Security Council umbrella, but also in other fora, includingthe G8. She is right; it is clear that we have to demonstrate that there is a peace dividend, which we are limping towards in southern Sudan. It has been much slower than I think we would all have wished, but we are beginning to see some little green shoots as a result of the deal a couple of years ago.

Baroness Park of Monmouth: My Lords, the Minister made reference to the intention now to proceed to strong sanctions on Darfur. Was any effort made by the Prime Minister and others to secure the support of President Putin for that, since we canbe sure that so far China, Russia and, I am afraid,South Africa frequently have resisted any effort to do anything about the Sudan? Was any serious effort made this time to secure support before it goes to the United Nations again?

Viscount Bridgeman: I offer my apologiesfor being slightly late for the resumption of the Committee. I shall speak also to AmendmentNo. 102. Clause 14 gives prison custody officers in contracted-out prisons and secure training centres powers to detain visitors where it seems that the visitor has committed an offence under Sections 39 to 40D of the Prison Act 1952. Both amendments seek to ensure that the new provisions in Part 2 meet adequately the intentions of Clause 14 as a whole. They are probing in nature because, if implemented, they would prevent the detention of any visitor to a prison, which I should like to make clear is not our intention. Rather, they seek to tease out exactlywho will fall under the ambit of the provisions of Clause 14.
	If accepted, the amendments would ensure that only those entering the prison as visitors to those held in custody or those working as employees of the prison would be subject to the new detainment laws. Currently, the wording of the Bill is so widely drawn that it would apply to representatives of the voluntary sector as well. The Minister in another place made it clear that the provisions of Clause 13, which was then Clause 11, were targeted at "criminality via visits". I hope that the Minister will be able to provide further insight into this definition. Can he also confirm whether he expects representatives of the voluntary sector to be included among those who may be stopped, searched and detained for up to two hours? We are keen to ensure that, while the most appropriate security measures are in place, this specific function of the Bill is clarified. I beg to move.

Lord Bassam of Brighton: The differences between public sector and private prisons that both this clause and related Clause 13 regarding search powers are intended to resolve relate to practices that are both unnecessary and inefficient. They create different operating practices between the two sectors, which in our view are detrimental to operations and security. Clause 13 gives police custody officers equivalent searching powers to those of prison officers in the public sector because, as the noble Viscount will know, the trafficking of drugs and other contraband is an operational problem that simply does not recognise the difference between public and private prisons. If we are to give PCO staff equivalent powers to detect smuggling activity, we must also give them powers to detain those undertaking it. However, we have specifically acknowledged that, given that we are dealing with employees of private companies rather than the Crown, tight controls should be placed on their powers of detention. For that reason we have not provided PCOs with broad constabulary powers as enjoyed by their public sector counterparts. Further, in the clause we have expressly limited the circumstances in which the power can be used and the maximum period of detention.
	Against that background, the amendment is in any event fundamentally flawed, as it seeks to limit the detention powers of a PCO to other employees ofthe prison and to exclude from them visitors, who arethe major source of trafficked items. We need this power to apply to all persons who may be attempting to bring items into the prison, which is why theclause was drafted as it was. It is designed to cover everyone—including visitors and those working in a prison—except the prisoners themselves.
	Accepting this amendment would, as I am sure the noble Viscount would acknowledge, send a message to those who seek to smuggle items such as drugs into private prisons that they may attempt to do so at no risk to themselves. If detected, they would simply be able to walk away with staff powerless to do anything to deal with the problem. That cannot be right. Indeed, it is precisely that result that the clause was intended to prevent.
	Finally, and importantly, the amendments would create a disparity between what could be done in the private and public sectors when a criminal offence was suspected, for which there is no sensible justification. In any event, the amendment is flawed not only in purposive terms but in the manner of its drafting. A close reading of the amendment reveals that it excludes from the power to detain many of those "in" a prison by inserting the word "employed" before it, but does not at all deal with those "seeking to enter" such a prison. The latter remain liable to be detained under this amendment. It seems unlikely that this was an intended consequence of the drafting, as it leads to an anomalous outcome.
	We will require contractually that staff be trained in how to exercise these new powers. In addition, sensible safeguards will have been put in place with regard to both the period of detention and the circumstances in which the power can be used. The contracts covering private prisons will continue to specify procedures to be followed and will place penalties, including financial penalties, on non-compliance. We also have the controller to monitor the application of the power, and other changes that we are proposing are intended to free up more of the time to undertake such tasks.
	The noble Viscount asked whether the power would capture those in the voluntary sector. The measure is aimed at providing a flexible power to ensure that anyone reasonably suspected of an offence under the Prison Act 1952 can be detained.It would be wrong to exclude those visiting on a professional basis, although I anticipate that the power will be used primarily for those making social visits. The power needs to be there in extremis to cover those cases, but its use would have to be proportionate in the circumstances. Having said that, I hope that the noble Viscount will feel able to withdraw his amendment.

Viscount Bridgeman: This follows on naturally from what the Minister was just saying on the previous amendment. My Amendments Nos. 101 and 103 would add valuable safeguards to the Bill to accompany the new power of detention given to prison officers. Currently, nothing in the Bill attaches specific child safety protection and welfare training in relation to the detention power. Given that a large number of people will be implementing this new power who will not have any experience of holding people in custody, it is vital that they are given the appropriate training in respect of detention, safe handling and the proper management of custody.
	The Minister will not have forgotten that wein your Lordships' House will shortly debate the provisions for a duty of care owed to those held in custody. I do not believe that we need to rehearse those arguments again. The principle has been accepted by the Government that the Prison Service, in whatever form, owes a duty of care to those held in custody. Noble Lords have made it clear that they hope that there will imminently be such provisions in the Corporate Manslaughter and Corporate Homicide Bill. These amendments would be an essential and helpful addition to those providing prison services. I beg to move.

Lord Ramsbotham: I support the amendmentfrom my own experience of seeing the lack of training among both public and private sector custody officers, which has always caused me considerable concern. In the previous days in Committee, we discussed the training of probation officers and the need for a long—indeed, degree-based—course in their work.
	To my mind, the custody officer, who has a very difficult task quite apart from the elements that are mentioned in the amendments, such as child safety, does not get good enough training to do their job, which is increasingly complex. It is small wonder that there are many problems connected with activities such as looking after young people, people with mental health problems or foreign nationals. Those run into problems because the staff are not trainedto deal with them. Indeed, I always remember an inspection of a young offender establishment that we had criticised for the appalling way in which children were being mistreated. The staff appealed to me to inspect them because they had not been trained to look after those particular people, and therefore that activity was an unfair burden on them.
	The Bill discusses the management of offenders. That management depends on the staff being able to carry out their tasks. If there is not a clear demand in the Bill that sets out the whole raison d'être of that management and reflects the scale and amount of training necessary to qualify people to carry out the tasks on the public's behalf in these places, the Bill is defective. We should seriously consider whether these amendments should go into it.

Baroness Linklater of Butterstone: I add my voice in support of the amendments. In these clauses, the powers of search and detention are being extended to the contracted-out and privately run YOIs and the STCs, all of which are privately run. That means that custody officers could be in the position of searching a child visitor. The management and the handlingof visitors in prison is an extremely sensitive areathat has to be properly and professionally managed. Although the notes to the Bill will be exercised in line with the relevant prison and YOI rules, there is no explicit reference to child safety, protection and welfare safeguards. This is a real and serious concern, so we support the amendments.

Baroness Gibson of Market Rasen: I support Amendments Nos. 101 and 103. It is of paramount importance that any custody officer is adequately trained to a high standard, especially when they are dealing with young people. I am sure that the Minister will tell the Committee that the Government support a high standard, and obviously I am pleased about that, but I hope that he will forgive me for being a little sceptical and for wanting to see this safely written into the Bill—if for no other reason than the fact that what happens today may not always happen tomorrow. The inclusion of the amendments would ensure that such standards did not slip and it would serve to remind those who run private prisons that some of the public, including politicians, will keep their eye on how they run those prisons, not only now but in the future.

Lord Dholakia: I apologise that I was slightly late coming into the Chamber. I support the amendments, because I was a member of a board of visitors at a prison in the old days and have worked for the Police Complaints Authority. As the noble Lord, Lord Ramsbotham, said, we expect custody officers to perform a very difficult task. The largest numberof complaints that I used to receive at the PCA concerned custody officers. They have a very delicate task. It is not disputed that training and, to an extent, the method of recruitment of custody officers would help to resolve this problem, but we are trying, inthe interests of children, to put into the Bill an amendment that would be a safeguard. I do not think that any person in their right mind could refuse to accept it. I hope that the Minister will take it back if he needs to and look at it seriously to see what he can come up with so that the interests of children are protected.

Lord Judd: I, too, apologise for not being here at the outset; I was at a meeting of the Joint Committee on Human Rights.
	This is not a theoretical issue. There has been all too much evidence in recent years of things going wrong with children in our custodial system. Therefore, it seems crucial not just to anguish about what has happened in the past but to put in theBill measures to ensure that these things will not happen in the future. Whatever our feelings about wrongdoing and crime, the moment of initial custody may for many youngsters be the most traumatic moment of all. It therefore seems particularly important that the people handling that stage understand everything that is involved for the young person, psychologically as well as physically.

Baroness Howe of Idlicote: I am sure that mine will be the last voice on this amendment. The amendment is crucial because so many children in custody suffered abuse in the past. Therefore, it is even more traumatic if they are tackled in an inappropriate way.

Lord Bassam of Brighton: I fully recognise thatthe basis of the amendments, tabled by the noble Viscount, Lord Bridgeman, the noble Baroness, Lady Anelay, my noble friend Lord Judd and the noble Lord, Lord Ramsbotham, is a concern to ensure, quite properly, that staff are competent to do their jobs and that we have the right safeguards to ensure that security and decent treatment of prisoners are not compromised. I especially understand the concerns about those detained in youth custody and secure training centres. The Committee will not be surprised to know that I share many of those concerns and that the Government are utterly committed to the maintenance of high standards of service delivery because we recognise that that is the only way to achieve the results on which there is a comity of view.
	Including this area in the Bill and specifying requirements on training was the subject of much attention in another place. My understanding is that similar amendments were moved there but rejected. It is still our view that including such a requirement is unnecessary in the light of safeguards in the clause and elsewhere. Differences between public and private sector prisons are unnecessary and inefficient, aswell as detrimental to operations and security. We do, however, recognise the very genuine concerns raised by these two amendments and are completely committed to ensuring that the treatment of children and vulnerable adults is to a high standard. The changes we are making in Clause 14 mean that private prison staff—PCOs—are more likely to detect items being illicitly brought into private prisons. We therefore need to give them effective powers to detain suspected offenders until the police can arrive to arrest the individual in the same way as prison officers operate in the public sector, because they have constabulary powers.
	We resist these amendments not because their objective is wrong but because the restrictions they would put in place duplicate existing practice. Additionally, any greater detail that might be thought necessary for the clarification of certain obligations can better be achieved through the contractual process. We must not forget that many safeguards already exist to ensure proper treatment of all visitors. First, PCO staff are required to be properly trained in all aspects of their job, and the quality of their training is open to inspection by the controller, who also approves the content of their training course—so there is already that independent view. The course includes sessions on correct searching techniques and child protection. Passing the course is a condition of employment as a PCO. Secondly, PCOs are subject to certification systems, to ensure they are competent and suitable, by the PCO Certification Unit, which is a public sector body. In addition, private providersare required to comply with the National Security Framework (NSF) covering both public and private prisons, which details the precise techniques that must be followed when searching children and vulnerable adults. We believe that these training measures will be sufficient, when they have been adapted to take account of the new power, to ensure that detention under the new power is carried out in an appropriate and lawful manner.
	In our view, the above measures, which have been in place since PCOs first started to discharge their duties, achieve the aims that the amendments seekto further. Consequently, it is difficult to see whatthe amendments usefully add in the absence of any concern that current training levels are inadequate for their purpose.
	In addition to the above, the controller plus Independent Monitoring Board members at the prison can witness at first hand that the correct techniques identified in the NSF are being rigorously applied. Failure to comply can be punished via existing contractual mechanisms, including by the application of financial penalties on the company running the prison.
	I am also concerned that the amendments would not apply equally to the public and private sectors. There is no similar requirement for prison officers to be trained in this way, yet they would be employing exactly the same techniques—and they operate around 85 per cent of the prisons in England and Wales. It is wrong to label private prison employees as in some way less competent than their public sector counterparts, when we know that there is good and poor practice in both sectors. Martin Narey has said that it would not have been possible to achieve the decency agenda in prisons had it not been for the involvement of the private sector.
	To the extent that it might be said that private contractors need to be made more aware of the details of their obligations—for example, with regard to conducting searches of, and detaining, children—we believe that a fair solution, which achieves precisely the outcome sought in the amendment, is to commit to ensuring that appropriate training in all aspects of the work and compliance with the NSF remain contractual requirements. Failure to provide properly trained staff or to adhere to approved searching techniques will be punished via existing contractual mechanisms, which include financial penalties. The controller will be able to oversee compliance as necessary. This means we can ensure that private prison staff are operating to the same standards as those in the public sector and that children are protected as they need to be, but also allows us the flexibility to respond to changes in training needs in the future without having to have recourse to primary legislation, which in this instance would be a clumsy way of tackling something that we all agree is important.
	The noble Earl, Lord Listowel, asked how far the five-day training had been rolled out. I would liketo answer him today but cannot. However, I will endeavour to write to him on that important background information.
	It is important that one essential matter is carefully considered in this debate: that the clause itself deals with a very short period of detention on suspicion of crime. I understand the valid concerns raised today but they relate to those detained in custody. This clause, of course, deals with visitors, not prisoners.

Viscount Bridgeman: I am most grateful to noble Lords for their support for the amendment. I am sorry that earlier I did not thank the noble Lords, Lord Ramsbotham and Lord Judd, for their support. This is an unequivocal ideal for which we should aim, and it is much better put into the Bill than left towhat the noble Lord called the contracting process. Nevertheless, it would help the Committee if he would write to us about the standards of training in place for prison officers and for those in the private sector.

Lord Bassam of Brighton: I am more than happyto share that information with all sides of the Committee. It is a very sensible suggestion.

Viscount Bridgeman: Amendment No. 104 is in my name and that of my noble friend Lady Anelay. Clause 15 marks a radical departure from the Criminal Justice Act 1991, which enabled the contracting out of private prisons while providing an important safeguard requiring certain functions to be performed only by directly accountable public servants. The powers were adjudication, judgment of prisoners charged with offences under prison rules, segregation, cellular confinement and the application of mechanical constraints such as body belts. Clause 15 would transfer those powers to the employees of a private company delivering a contract at a contracted-out prison, potentially removing the direct line of public accountability from the PCO to a controller based in the new Ministry of Justice.
	I am introducing the amendment and this line of argument regardless of any debate to do with the ethics of providing prison services through the private sector. Safeguarding and accountability in prisons is inextricable from the protection of the public and the accurate deployment of the duty of care that the Government owe to those whom they hold in custody. Clause 15 enables the Secretary of State to stipulate by order certain restricted activities that, by default, would be carried out by a prisoner custody officer or a prison officer temporarily attached to the prison, but that could be carried out by workers at a contracted-out prison with the authorisation of the director of the prison. The amendment would ensure that the Secretary of State included in the list of restricted activities those that are most essential to the preservation of safety and order in a prison—namely, the control of entry and exit of visitors and the staffing of prison control rooms.
	I do not wish to undermine the capabilities of staff in the private prison sector. That is not what this amendment is about. It is about maintaining the safeguard of public accountability in a service where, at each legislative turn, the Government seem to seek to abdicate responsibility. In the debates on the Criminal Justice Act 1991 before it was introduced, the then Minister—now my noble friend Lord Waddington—stated that private prisons would have assigned to them,
	"a Government-appointed controller, who, rather than the private sector director of the establishment, would conduct disciplinary hearings, authorise a prisoner's removal from association, his confinement in a special cell, or the application to him of any other special control or restraint".—[Official Report, Commons, 20/11/90; col. 151.]
	Yet this Government have seen fit to downgrade that function, as the Minister in another place rather glibly confirmed. He said:
	"Although we accept that the current restrictions made sense when private prisons were first introduced, they appear to be increasingly unnecessary".—[Official Report, Commons, 28/2/07; col. 1015.]
	The majority of private prisons perform well. Indeed, I would not want to overlook the fact that since they were introduced, private prisons have inspired far greater performance across the whole prison estate. I do not deny that and I congratulate them on their work. However, in this instance, we must focus on the minimum standard of performance expected and the safeguarding of that through public accountability. An analysis of the lowest performing private prisons is necessary.
	The need for the amendment is even more pressing following the most recent report of the Chief Inspector of Prisons. I am afraid that the prognosis on the private prison estate was not as good as we might hope. I am grateful for the assistance of the Prison Reform Trust regarding this report. On Forest Bank, the chief inspector noted:
	"There had been 2,500 adjudications for offences against prison discipline in six months; drugs were rife, with a 40% rate of positive mandatory drug tests in the most recent month; prisoner assaults on other prisoners were running at 25 a month; and there were examples of assaults on, and routine intimidation of, staff. Staff turnover was high, and many lacked the experience and confidence to challenge inappropriate behaviour".
	That again relates to the training problem. The most recent report on Rye Hill stressed,
	"the inexperienced and poorly supported staff group, 30% of whom had been in post less than 6 months".
	The report on Dovegate talked of,
	"stretched and inexperienced staff struggling to maintain control",
	and of,
	"worrying examples of searches not being conducted properly and of inappropriate use of force".
	The complaint of the noble Lord, Lord Judd, about training runs right through those reports. As it stands, the delegation of responsibility on custodial tasks is too great a risk to take for that part of the private prison estate.
	I hope that the Minister will consider accepting the amendment; indeed, I fervently hope that when it is accepted, it will be implemented in the context of the Government owing a legal duty of care to those held in custody. It would surely be the greatest safeguard that we could hope for.
	In the mean time, I urge the Minister to consider the full implications of separating the link between crucial custodial tasks and public accountability. It has been said previously that a Government who have nothing to be ashamed of have nothing to hide. I hope that the Minister will look on this as an opportunity to make a positive concession that demonstrates the Government's faith in the private prison system. I beg to move.

Lord Waddington: Although it was a long time ago, in 1990 I think we envisaged that, barring a disaster, confidence in private prisons would grow with the years and the restrictions on the activities that could be carried out by workers in private prisons without special authorisation would gradually disappear. This amendment is useful because it gives the Minister the opportunity to justify the plan to allow authorisation of activities that are at present restricted. My noble friend referred to the words of the Minister in the other place, who said:
	"Although we accept that the current restrictions made sense when private prisons were first introduced, they appear to be increasingly unnecessary".—[Official Report, Commons, 28/2/07; col. 1015.]
	However, the Minister did not begin to explain why he thought that the restrictions were now unnecessary.Is it because private prisons are better run thanthey were 10 years ago? Is it because there is less indiscipline? That does not seem to square with the inspector's report on Forest Bank. My noble friend quoted from that report and those on Rye Hill and Dovegate. We should be constructive and not just imagine difficulties to justify the maintenance of restrictions. I am certainly not here to make difficulties of that sort. We need some help from the Minister to be convinced that the time has come for a major step forward. There was not the beginning of an explanation in the other place so it would be appropriate if there was a full explanation now.

Lord Ramsbotham: I am interested in this amendment; a later amendment in the name of the noble Baroness, Lady Gibson, which has now been withdrawn from the Marshalled List, was aboutthe adjudications that are carried out by directorsof private sector prisons. That matter causes considerable concern to the Prison Governors Association in particular. When the private sector prisons started, the post of controller was put there as well, as I understand it—the noble Lord, Lord Waddington, will know better than me—to be the monitor of the contract. That is a very important role. One of the things that I found disturbing in the recent reports by the chief inspector was the suggestion that there are attempts to work around the contract and not to honour it in total. If there was not a contract monitor there to see it, there might be even more such attempts, which would reduce the effectiveness of the whole custodial operation.
	As well as the suggestion that adjudications could now be carried out by the director on the grounds that directors have proved themselves as being just as capable of running an establishment as the governor of a private sector prison, I understand that it has been suggested that one of the two monitors or controllers could now be removed, which would be a cost-cutting exercise. That would be enormously unwise because the duties of monitoring a prison, particularly as they become more and more complex, with more and more contracts to be monitored, are more than a full-time occupation. I have talked to some of the contractors, who are deeply concerned about this. Looking at this amendment and the whole way in which the private sector prisons are conducted, it is important that the issue of monitoring the contract by people who are there is looked at very seriously so that we—the public—can be confident that those prisons are really being conducted in the way in which we would expect them to be. That is why we have our—the public's—monitor there on our behalf.

Baroness Gibson of Market Rasen: I thank the Prison Officers Association for briefing me on the amendment. The Bill is currently silent about which restricted activities the Home Secretary plans to allow non-prison custody officers to perform. I understand that that will be revealed only when the Home Secretary publishes the order, which will be "subject to negative procedure" in relation to which restricted activities a worker may be authorised to carry out. Once the order has been passed, it will be for the director of the private prison to instruct non-prison custody officer staff to carry out some, if not most, of the currently restricted activities. Amendment No. 104 is, I believe, an attempt to clarify at least some of the restricted activity areas that may be the subject of any such authorisation and place them in the Bill. As such, I support it.

Baroness Howe of Idlicote: I add my support for the amendment and thank the Prison Governors Association for its briefing. I reiterate the point that I made on the previous occasion: many visitors will almost certainly be the kith and kin of people who are inside prison. As such, they are likely to be fairly vulnerable and may react in inappropriate ways to certain methods of restraint.

Lord Bassam of Brighton: Before I get into the body of Clause 15, it may be worth saying a few words on another matter. I think that, inadvertently, the noble Viscount, Lord Bridgeman, sowed seeds of potential confusion in addressing issues which would have been more properly bound up in a debate that we probably will not now have on Clause 16, which relates to the removal of controllers and adjudications and so on—at least, that was the perception. We should focus on that because it will help us in terms of the order of debate, although I was grateful for the intervention of the noble Lord, Lord Ramsbotham, and shall say something about the work of the controller.
	It is important to dispel the notion that we are somehow removing existing restrictions. In my view, we are simply removing a confusion that arises from the drafting of the 1991 Act. This does not really have anything to do with the responsibility of controllers. As I said, Clause 16 deals with that, and, as we know, there are currently no amendments before us on that issue.
	Before I get into the content of Clause 15 and the related amendments, I should also say something about recent reports on private prisons by HM Inspector of Prisons, because that was raised during this short debate. I cannot accept the assertion that somehow the private sector is going backwards. The perception is that private prisons have worked well and that there is improvement in that sector, as there is in public sector prisons. I do not pretend that there are no problems in either sector, as clearly reports indicate that from time to time there are, and those problems have to be properly dealt with. Here, we are seeking to address the difficulties of dealing with drugs, mobile phones and other illicit items that come into prisons. We must focus on adopting packages of measures to ensure continuous improvement across both sectors. However, I am grateful for noble Lords' comments on those reports because they relate to important and significant issues.
	Perhaps I may bring us back to Clause 15. The changes that we are making in relation to private prisons in general, and specifically in this clause to the range of tasks that can be undertaken by non-PCO grades, are intended to resolve what we see as unnecessary and inefficient differences between the public and private sectors. We are trying to create parity in terms of operational flexibility and staff deployment between equivalent staff grades in both sectors. Neither side will have greater power than the other. The way in which staff need to be deployedis constantly evolving in response to changing operational demands. Issues apply equally regardless of whether the prison is publicly or privately operated.
	The public sector already employs operational support grades—OSGs—to work alongside prison officers. These OSGs perform a limited range of custodial duties in support of the prison officers. The equivalent of an OSG in a private prison is an auxiliary officer or AO. Owing to restrictions in the Criminal Justice Act 1991, the only people who can perform custodial duties in a private prison arePCO grades. The absence of a clear definition of a custodial duty in that original Act has created unhelpful confusion over what operational duties non-PCO staff can undertake. This position becomes potentially ever more unclear as the public sector, which is free of any restrictions imposed by legislation, makes ever greater use of OSGs to support prison officers in their custodial work. We wish to remove the disparity between how equivalent grade staff are deployed across the two sectors. This will resolve unhelpful procedural differences and remove the commercial advantage held by HM Prison Service as an OSG is paid less to do the same work. I stress that we are not looking to give a non-PCO any power beyond those already held by their public sector counterparts.
	The amendment addresses an issue quite properly raised by the Delegated Powers and Regulatory Reform Committee in its recent report on the Bill. At first glance I willingly concede that this amendment appears helpful, as it would place on the face of the legislation a clear indication of the sorts of work we are proposing to allow non-PCO staff to undertake. The tasks listed may well form part of our initial list of duties to be permitted. On closer inspection, however, the amendment is unnecessary and unhelpful. New subsection (2) in Clause 15(2) already provides an order-making power to allow the Secretary of State to list tasks that may be performed. We contend that there is nothing in that power that prevents the listing of the tasks covered by the amendment, so it is far from obvious why the amendment might be thought necessary.
	If the purpose of the amendment is to seek clarification of our intentions, we are happy to confirm that the tasks that staff are likely to perform are similar to the sorts of activity specified in the amendment. During the drafting of the clause, great care was taken to ensure that our approach struck the correct balance between the need to ensure proper public accountability—an issue that has been raised by noble Lords opposite—and necessary operational flexibility, which is something that we all recognise. By specifying types of work in primary legislation, we will risk destroying the very flexibility that this power is created to provide.
	First, we need the private sector to be able to deploy its staff in the same way as equivalent grades in the public sector. No doubt that was in the mind of the noble Lord, Lord Waddington, way back in the early 1990s. No such restriction applies to Her Majesty's Prison Service, so it can continue to deploy in innovative ways which the private sector would not be able to match. I cannot see the sense in that.
	Secondly, we need to future-proof the legislation. Although we may currently want to allow non-PCO grades to do both the tasks listed in the amendment, we cannot be sure that this would always be the case. Including these tasks but not others rather begs the question why we do not list other tasks that we currently envisage being included in an initial list of activity. There is no obvious answer to that question if we retain the reference to some tasks in primary legislation but not others. In that regard, mentioning specific tasks on the face of primary legislation begins to have the appearance of effectively listing them in that legislation, which is directly contrary to the desired approach. If operational requirements change and we wished to place greater emphasis on other tasks, or less emphasis on the specific tasks of entry control and control rooms, it would be much easier to add or remove this emphasis via an order-making power subject to negative procedure than it would be to have to amend primary legislation to do so.
	We need to be cautious of an approach that does not clearly define what the task would allow, as that leaves matters subject to interpretation by contractors themselves, which could be unhelpful and would be contrary to the apparent intention of the amendment. In this case, for example, the amendment would specifically permit non-PCO staff to allow visitors into and out of the prison but not staff, which neither makes sense nor matches what OSG grades are already doing in public prisons.
	We believe that we have built in appropriate safeguards on the sort of work that can be done by non-PCO staff by virtue of the order-making power we have proposed, and that that satisfies the need for accountability as well as the necessary balance with operational flexibility. Additional safeguards at establishment level exist in the form of a requirement that the director authorises the person to do the work after satisfying himself that the individual is competent and—to pick up the important issue of training, which many noble Lords have referred to—adequately trained to carry out those tasks. Also, the controller has to be able to observe operations to ensure that no unauthorised tasks are undertaken.
	I apologise for taking so long to go through this, but I wanted to ensure that the Committee fully understood exactly what was being put forward in the amendments and the difficulties with creating a legislative straitjacket in terms of fixing on non-PCO staff constraints that do not make a lot of sense. If we did it in the Police Service where we have police community support officers, I am sure that noble Lords opposite would challenge us and say that we were over-regulating. We do not need it in the Prison Service; I do not think it will work.

Viscount Bridgeman: I am grateful if the amendment has had the unexpected effect of causing Clause 16 to be debated. We shall look carefully at the Minister's reply to this very involved debate, andin the mean time I beg leave to withdraw the amendment.

Viscount Bridgeman: This amendment, too, seeks to improve Clause 15. It turns the focus onto subsection (2) and would implement a further safeguard to ensure that any worker in a contracted-out prison carrying out a restricted activity hadthe correct training. It seems highly surprising that currently there is no requirement on the face ofthe Bill for appropriate levels of training to be undertaken prior to executing custodial functions.
	I am sure that I do not need to remind noble Lords of the figures for the worst-case scenario in a prison—where a prisoner dies while in custody. I do not wish to make a judgmental comment on the case of Adam Rickwood, who committed suicide a number of hours after he was subjected to a restraint technique. Although the use of that technique might be acceptable, what gives cause for concern is that it was clear that he was suffering from mental problems. I note that an Oral Question has been tabled on this matter for tomorrow, so the matter might come up. That was just one of the 2,000 deaths in custody between 1995 and 2005.
	These examples highlight to us the overall risksin the prison estate, which is full of a set of extraordinarily challenging individuals who often pose the greatest harm to themselves. I would not claim that even the most perfect training would prevent such incidents, because there are too many variables in the system. However, where we can establish safeguards and ensure high standards of practice, it is clear that we should do so. That is why this amendment is so important—if not the wording, then the principle—and why I sincerely hope that the Minister will be able to accept it. I beg to move.

Lord Bassam of Brighton: I recognise the background of and basis for this amendment tabled by the noble Lords opposite. I share their concerns to ensure that staff are competent to do their jobs. I reiterate that not only do I share those concerns but the Government are completely committed to the maintenance of the highest standards of delivery, because that is the only way in which we can achieve the outcome that we all wish.
	Similar amendments were proposed in another place but were rejected, as it was accepted that placing training requirements in the Bill is unnecessary in the light of safeguards already contained within and outside the clause. It is important to remember that no such formal requirements on training apply to equivalent public sector staff performing the same duties, which is the issue that we rehearsed earlier, and that none of the powers proposed is different from those exercised by equivalent public sector staff.Even if we ignore those factors, we contend thatthe successful track record of private companies in delivering custodial services already offers assurance that they can be relied on to use competent and properly trained staff.
	The private sector is no different from the public sector in seeking to ensure that it benefits from a trained and competent workforce. All private prison contractors require any newly appointed staff to undertake training prior to commencing their duties. That also applies in the public sector. Training may vary between contractors, but the goal is the same: a workforce with the necessary skills to deliver the contract. Before being able to do any of the tasksthat Parliament will have had the opportunity to determine, a non-PCO grade would have to be authorised by the prison director to be a competent person to do so, and one of the key tests that a director would employ would be to satisfy himself that the person was suitably trained. In private prisons, unlike in the public sector, the contract enables financial penalties to be levied for operational failures, which is a powerful incentive for directors to use only staff with the necessary skills and training.It is also worth remembering that the controllercan examine training packages, attend sessions and observe outcomes first hand.
	The amendment is also vague because it givesno definition of what "appropriate" means in this context, nor does it make clear who would make that assessment. In reality, such considerations are clearly already being undertaken by the director as the clause is drafted.
	I hope that, having heard my response, the noble Viscount will feel able to withdraw the amendment.

Baroness Noakes: I will also speak to Amendment No. 91. We return to the conflict of interest provisions in paragraph 2 of Schedule 6 and their relationship to the declaration of interest provisions in paragraph 13.
	Amendment No. 89 would insert the words "direct or indirect" into the definition of a conflict of interest in paragraph 2(6). At present, the definition includes "financial or other" interests. When the Minister in another place explained this, he said that "or other" was designed to catch a member of a person's family running a company that could be affected by the introduction of personal accounts. I put it to the Minister that that is not an interest of the person at all—it is not an "other" interest—it is the interest of someone else, and so the requirement that a person appointed as a chairman or non-executive does not have a conflict of interest would not be met.
	I can readily understand that a relationship with another person could be an "other" interest, but not the fact that that other person had some business interest in personal accounts. If the Minister is going to claim that the relationship is the "other" interest, does its existence mean that all the financial interests of that person get drawn in? The drafting is vague because, if it does refer to relationships, it is unclear where they begin and end. Do siblings count orjust spouses? What about infant or adult children? What about parents and grandparents? What about co-habitees?
	I contrast that with the provisions in paragraph 13, which deals with declarations of interest. In that paragraph, the phrase "direct or indirect" is used in relation to the relevant interest, which is why I have drafted it into Amendment No 89. Paragraph 13 also imports the Companies Act definitions of persons connected with a director, which seem to give some certainty about the relationships that are important.
	I hope that the Minister will reflect on the ambiguity of paragraph 2 and on AmendmentNo. 91, which requires that if there has been a declaration of interest under paragraph 13, it should be notified to the Secretary of State. There is a difference between a conflict of interest and a declaration of interest, but I think that it is a question of degree rather than real difference. At some point along a spectrum, a declaration of interest will also be a conflict of interest. My amendment is designedto ensure that the Secretary of State, who byparagraph 2(2) has to keep the issue of conflicts of interest under review, has the relevant information. There does not appear to be any other way for the Secretary of State to find out about declarations of interest. I beg to move.

Baroness Morgan of Drefelin: I thank the noble Baroness for her thoughtful and helpful contribution, which has allowed this short debate to take place. I hope that I can assure noble Lords that we consider the role of the chairman and non-executive members to be crucial to the effective operating of the authority. Not only will they bring a wealth of knowledge and experience to the authority, but they will also, in carrying out the non-executive functions, provide an important independent role.
	The Secretary of State will be looking for candidates of the highest calibre when making these public appointments. That will include ensuring that a non-executive does not have a conflict of interest that is,
	"likely to affect prejudicially the discharge by him of his functions as a member of the Authority".
	That is made clear in paragraph 2 of Schedule 6. Sub-paragraphs (6) and (7) define a conflict of interest and state the parameters that the Secretaryof State must use in deciding on the suitability of non-executive members.
	Amendment No. 89 proposes that the Secretary of State must consider a direct or indirect conflict of interest when appointing the chairman or another non-executive. The inclusion of "direct or indirect" in the criteria that the Secretary of State should consider does not add anything. As I have explained, the definition of conflict of interest is to be found at sub-paragraphs (6) and (7) and it includes direct and indirect conflicts of interest. Paragraph 2 already provides sufficient assurance that the non-executive members will be free from a conflict of interest. I therefore do not want to include that additional requirement.
	Amendment No. 91 proposes that the delivery authority should notify the Secretary of State ofany declaration made under paragraph 13. That paragraph relates to disqualification for acting in certain matters—in particular, at meetings of the authority, the chairman or other non-executives, or any committee or sub-committee.
	Paragraph 13 already provides assurance that,in carrying out its work, the authority and any ofits committees or sub-committees should follow appropriate procedures in terms of transparency and accountability. That measure is especially pertinent when considering the work of committees. As the Bill makes clear, the authority can invite people who are not members or employees to sit on a committee. It will be for the delegated authority to decide how it uses that ability and whom it might like to invite, but it is likely that persons may include, for example, individuals who work for organisations representative of consumers, employers or the pensions industry.
	In the same way as noble Lords declare interests before speaking in the House, it is right that persons invited to sit on committees of the authority should also declare any direct or indirect interest in a matter that is being considered. Such a declaration by noble Lords does not devalue their contribution; so it will be in committees of the authority. It is of course right that any such declaration is recorded appropriately. The Bill makes provision for any declaration to be recorded in the minutes of the meeting. To requirethe authority to inform the Secretary of State every time such a declaration is made seems an overly bureaucratic measure, although I understand why the noble Baroness raises the questions in debate here for clarification.
	The provisions in the Bill enabling the Secretaryof State to request necessary information from candidates or post-holders when assessing whether non-executives have a conflict of interest are an appropriate requirement that provides sufficient safeguards. I understand the point that the noble Baroness makes regarding the difference between declaring an interest and there being a conflict of interest. I imagine that procedures would be routinely in hand to ensure that conflicts of interest are recorded and handled in a transparent and appropriate way. Having provided that information, I hope that the noble Baroness will consider withdrawing her amendment.

Baroness Morgan of Drefelin: To reflect a moment on what the noble Baroness said, I did not say thatI imagined that conflicts of interest would be recorded—if I did, that was not my intention.

Baroness Noakes: I can be brief on Amendment No. 94. Under Schedule 6(3), a person can be appointed for any period and reappointed any number of times. Although I am aware that it is not the intention for the delivery authority to go onand on, stranger things have been known. My amendment, which would not constrain the early and, we hope, only years of the authority, states that the appointment should not exceed five years and that the total for any appointment should not be more than10 years. That is all standard corporate governance stuff. I beg to move.

Lord McKenzie of Luton: I hope that I can be equally brief. In all cases involved with public appointments, we or, later, the delivery authority will follow the Office of the Commissioner for Public Appointments code of practice. Although the code does not specify the length of individual terms, it clearly sets out that appointments will normally be restricted to two terms and that the total service on the same board should not exceed 10 years.
	Our plans for the initial appointments to the delivery authority are for a three-year term, with the option to reappoint members at the end of that term, subject to satisfactory performance. It will be forthe delivery authority, subject to Secretary of State approval, to determine the terms and conditions of subsequent non-executive appointments. If noble Lords have seen the recent advertisements for the initial appointments to the authority, they will have noted that they are subject to the Bill receiving Royal Assent. Should the Bill not receive parliamentary approval, those appointments could and would be terminated.
	To clarify, Clause 21 sets out in primary legislation the requirement that we must have regard to all guidance. The guidance that we shall follow in this respect is that of the Office of the Commissioner for Public Appointments code of practice.

Baroness Noakes: I shall also speak to Amendments Nos. 97, 101 and 102. The amendments relate to the pay and pensions of non-executive members of the authority. Amendment No. 96 would delete paragraph 4(2), which allows the chairmanand non-executive members to receive pensions, allowances and gratuities. The Minister will be aware that non-executives in the private sector do not receive pension benefits. I am aware that these provisions are often written into statute for public sector non-executive appointments. Will the Minister therefore say what the normal public sector practiceis for the accrual of pension benefits for the non-executive chairman and non-executive director? Will he also say what the Government intend to do for appointments to the delivery authority?
	The Minister will be aware that the cost of meeting a pension is likely to add 20 or 30 per cent to the salary cost for senior appointments, whether on defined benefit or defined contribution terms; so it is important that Parliament understands what is being permitted under the Bill. The Government are already recruiting for the new appointments, as the Minister has already reminded us this afternoon, so are the new appointees to be offered pensions and, if so, on what terms?
	Paragraph 4(2) also contains wording—namely, "allowances" and "gratuities"—that appears tocome from the Victorian parliamentary draftsman's handbook. I think I know what allowances might be, but I always thought that gratuities were what I paid my hairdresser and taxi driver. Will the Minister explain what, in this modern day, gratuities are intended to mean in relation to appointments to the public sector?
	Amendment No. 97 would delete paragraph 4(4), which says in effect that a non-executive with pension arrangements who becomes an employee or executive director can carry on being treated as a non-executive in his pension scheme. As I have never heard of the distinction of being a non-executive in a pension scheme, I have also proposed this deletion as a probing amendment. What is the significance of keeping non-executive status in a pension scheme?
	Amendment No. 101 would delete paragraph 7(4). This is the mirror of the previous proposed provision. Here, an executive would become a non-executive, but his service as a non-executive could be treated as that of an employee. I also propose this deletion as a probing amendment. Lastly, paragraph 8(3) says that if an employee becomes an executive or non-executive member, he can carry on being treated as an employee. As I am mystified by pensionable executives and pensionable non-executives, I have proposed deleting the reference to non-executives also as a probing amendment.
	I hope that the Minister can explain this arcane world of rewards for non-executives under the Bill. I beg to move.

Lord McKenzie of Luton: Again, I thank the noble Baroness for making a series of intriguing points.As she may already be aware, the Cabinet Office guidance states that most public appointments are not pensionable. We therefore do not think that we have got this right, and will reconsider the wording. That will cover the other points that the noble Baroness has made. That is two in a row; I would not encourage her to think that this is a precedent.

Baroness Noakes: I shall also speak to Amendment No. 105. Paragraph 9 of Schedule 6 deals with the delivery authority forming committees. By virtue of sub-paragraph (3), at least one personon these committees, apart from advisory ones, is a member or employee of the authority. This means that the authority will set up committees to carry out its functions, over which it could lose control. My Amendment No. 103 proposes that the majority of members of these non-advisory committees, if I may use that shorthand, must be members or employees of the authority. If committees carry out functions on behalf of the authority, surely they should remain controlled.
	Paragraph 14 says that the authority can delegate its functions to committees. Amendment No. 105 would add a similar rider to the effect that the chairman and the majority of members of a committee carrying out a delegated function should be members of the authority. I beg to move.

Lord McKenzie of Luton: The amendments focus on the authority's ability to form committees and the important related issues of good governance and accountability. In making provision for the authority to set up committees, the authority will have the flexibility, where the board thinks it useful, not only to draw on the expertise and skills from within the authority but to harness external expertise. In the course of its business, the delivery authority is likely to want to bring in external expertise to examine proposals on a specific topic.
	The Bill provides the authority with the ability to meet its challenges as it thinks best, including by setting up a committee that includes external members if that appears to be the most appropriate method. In these circumstances, it is right that the authority can use the committee structure to ensure accountability and control. However, to impose the requirement that the majority of committee members must be authority members or employees, as Amendment No. 103 would do, or to impose thesame requirement when delegating to a committee, as Amendment No. 105 would do, could underminethe authority's ability to conduct its business most efficiently and effectively. Although I fully accept the need for some delivery authority representation on any committee, the legislation already provides forat least one member of a committee to be either a member or an employee of the authority, or both. I hope noble Lords will agree that the Bill contains adequate checks and balances to ensure that decisions remain the responsibility of the authority, and that the authority remains fully accountable.
	It is important to bear in mind that we are dealing with the delivery authority in its initial phase, the advisory phase. We will, as a matter of course, review the practical provisions in the Bill to ensure that they are fit for purpose for the next stage—delivery of the personal accounts. For those reasons, what the Bill proposes for the advisory phase is appropriate.

Baroness Noakes: I accept that the question ofthe delivery authority may give rise to slightly different issues. Nevertheless, it will be preparing for implementation as well as simply giving advice, and it occurs to me that if any of its function of preparing for implementation were put to a committee, which it might be as relatively few of its members are members of the authority, it would not be right for the authority not to control it. I shall think further about what the Minister has said. We will clearly return to this issue when we consider the next Bill, if the drafting of this part about committees remains in the longer term, but before Report I shall think carefully about whether it is relevant for this Bill. I beg leave to withdraw the amendment.

Baroness Noakes: I shall also speakto Amendments Nos. 107 and 141. AmendmentsNos. 106 and 107 relate to the delivery authority's annual report. Amendment No. 106 would require the report to show separately the cost of preparing and implementing the new system, while AmendmentNo. 107 would require the accounts to show the expenditure by the authority that should be recovered as part of the personal accounts system. The amendments speak to the concerns of pension providers about the recovery of cost and the avoidance of subsidies, which we will debate in more detail when we discuss a later amendment.
	The more important amendment in this group, Amendment No. 141, inserts a new clause after Clause 22 requiring a new report to Parliament on the estimated costs of the personal accounts scheme on a six-monthly basis. I hope that the Minister will find nothing to criticise in its drafting since it is based on Section 36 of the Identity Cards Act 2006.
	There is a concern about all large projects in the public sector. There is a poor record of delivering new IT systems. The Child Support Agency, the Rural Payments Agency and tax credit systems are recent examples of large systems which have failed to deliver in a significant way, whether by way of cost overruns, failures to deliver the required functionality or a combination of both. The massive NHS IT project will certainly cost more than originally estimated and the jury is still out on functionality. The ID cards scheme raised exactly the same concerns, which is why the Government, in their wisdom, accepted an amendment in another place similar to this one.
	We might just say that we will wait for the failure to occur and let the National Audit Office and the Public Accounts Committee in another place do their work of picking over the disaster scene. But that would not be very responsible, given the very real need to get the personal accounts scheme up and running by 2012, which could lead to higher costs, and the question could arise as to how those costs should be borne. If they are to be borne by the public purse, that could act as a subsidy to personal account savers and possibly act as a detriment to providers of other savings products, which is why the Association of British Insurers has suggested this amendment. However, if costs, however great, are to be borne by personal account holders, that too will be of interest in the context of whether the system will deliver the promised economic benefits to savers.
	At the moment, costs are a big unknown. The only thing we know is that £21 million will be spent on the delivery authority. Cost recovery is still somewhat vague. Because of that, it is important that the overall cost of the scheme as it develops is brought to the attention of Parliament on a regular basis, which would allow proper accountability to and debates within Parliament if things appear not to be going right. Importantly, it would provide important and relevant information to those in the private sector who are affected by the way in which the personal accounts system is developed. I believe that these amendments are modest and I beg to move.

Lord Oakeshott of Seagrove Bay: We on these Benches are sympathetic to noble Baroness's intention that there should be regular reports and, in particular, given the long and dishonourable history of failures of government or public sector IT contracts, an eye should be kept on how that is progressing. I am not sure I look forward to hearing from the Minister whether every six months is goinga bit over the top—slightly too much pulling upthe plant to see how it is growing. In general, on this amendment and a number of others about the operation of the personal accounts scheme, we should always bear in mind that the Association of British Insurers is not totally independent. Of course, it is a competitor to some extent of the Personal Accounts Delivery Authority. While that does not mean that its points are not valid, we should just bear that in mind. So I am sympathetic on the principle, but I wonder whether the proposed reporting is slightly too frequent.

Lord McKenzie of Luton: As explained, Amendments Nos. 106 and 107 would amend Schedule 6, requiring the delivery authority to provide certain detail in its annual financial statement. New Clause 141 would require six-monthly reporting of public expenditure in connection with the personal accounts scheme.
	Taking the amendments to Schedule 6 first gives me the opportunity to explain the existing reporting requirements set out in that schedule. The provisions require the authority to report annually on its performance and financial position, a requirement which applies equally to other NDPBs. Unlike every other NDPB, the authority will be required to provide this report to the Secretary of State and the Comptroller and Auditor General for examination and approval. Amendments Nos. 106 and 107 would include in primary legislation a requirement to account separately for the implementation and advisory services of the delivery authority. It would also require details to be included of the authority's expenditure which would be recovered from future income of the scheme derived from the public purse.
	This Bill focuses on the setting-up of the delivery authority, allowing it to provide advice and consider proposals on the most effective way to finance the scheme. The income and expenditure associated with the personal accounts scheme that will be incurred beyond this advisory phase is not a matter for this Bill. It is our intention to bring forward further provisions on the scheme, including details on its funding arrangements in the subsequent Bill. We are currently evaluating what funding will be needed to support the successful delivery of the scheme and there will be ample opportunity for Parliament to scrutinise that detail in due course.
	I can assure Members of the Committee that in our stewardship role, my department will regularly review the expenditure of the authority and the Secretary of State will have the necessary powers to require preparation of any information such asthis. However, we see no benefit in adding further burdens to the comprehensive regime of financial accountability, which already exists to report the authority's annual expenditure.
	In the spirit of keeping Members of the Committee informed, I should like to give notice that we intend to table an amendment to paragraph 19of Schedule 6 on Report. This paragraph currently requires the Comptroller and Auditor General tolay the delivery authority's audited accounts before Parliament. However, the NAO has informed us that recent policy has been to require the sponsoring department to perform this role; therefore, we will introduce that change.
	On Amendment No. 141, the financing of the personal accounts scheme is important, and I can confirm that it is intended to be self-financing in the longer term. However, as I have already said, this Bill focuses on the setting-up of the delivery authority, initially with a remit to provide advice. The funding of the delivery authority was discussed in the other place. My honourable friend, James Purnell, the Minister with responsibility for pensions reform, made clear that the authority's sole source of finance for this initial phase will be grant in aid.
	As mentioned earlier, the funding of the personal accounts scheme is not a matter for this Bill. It is our intention to bring forward further provisions on the scheme, including details of its funding arrangements, in a subsequent Bill. On that basis, I hope thatthe noble Baroness will feel able to withdraw her amendment. Perhaps I may just add that we all recognise the importance of getting this under way so that we can deliver personal accounts on time. Therefore, I look forward to continuing co-operation for the speedy passage of this Bill through this House.

Baroness Noakes: I do not think that I will respond to the latter point; it depends on how amenable the Minister is as we proceed through Committee and the later stages of the Bill. I thank the noble Lord, Lord Oakeshott, for his comments. Six months may be too frequent. I note that he has said that the ABI isan interested party. Frankly, so is practically every interest group which gives us detailed briefing, whether it is a consumer group, a trade union or whatever. I have no problem in representing theviews of a significant part of our financial services sector which would be significantly affected by a government Bill.
	The Minister says that the funding et cetera is not for this Bill but that we need to keep an eye on costs as they start to emerge, which they will during this preparatory stage. There is potentially a gap between what we are doing here, setting up accountability for what will happen in the personal accounts scheme when it is delivered, and what will happen once we get another Bill some time in the next Session. I am not entirely convinced that everything will roll over into the next Bill, although clearly we will look at these issues in at least as much detail. There is still the need to see the costs as they emerge. It could be quite some time. The next stage is to have another body on which to focus our attention. Having read Hansard, I will think about what the Minister has said, but for the time being I log up that I am not 100 per cent on the same page as the Minister because I think that he is not dealing with an information gap. I beg leave to withdraw the amendment.

Lord Oakeshott of Seagrove Bay: This amendment asks the authority—in a moment I shall explain why I think it is appropriate for that body—to give estimates of the percentage of people who will be subject to means-testing if enrolled in personal accounts, to estimate the percentage of people with varying returns from their savings, and to provide a breakdown of the target group for personal accounts of people who are most at risk of low returns. All this is intimately linked with the plans for the free delivery of generic financial advice, which will be particularly relevant for low-earning people. I thank the Equal Opportunities Commission, particularly for its joint briefing with the Pensions Policy Institute, whichdoes exceptionally valuable work year in and year out on these issues, and the Resolution Foundation, particularly on generic financial advice.
	I remind the Committee that the PPI has made it clear, as we all do, that in principle personal accounts are a very good thing, as they provide a low-cost pension for many people who increasingly are not covered as our private pension provision declines inexorably. But equally, some individuals run a high risk of getting back little more, or possibly even less, than the value of their own contributions protected for inflation. Again, this is because we are not getting away from means-testing, or reducing it nearly as fast as Members on these Benches would like, so the risk of that unsatisfactory outcome is increased. Herewe are talking particularly about women and the self-employed. As the PPI points out:
	"A combination of career breaks and low earnings can increase the risk of finding Personal Accounts unsuitable. People in their forties and fifties today may get less value than today's younger people from Personal Accounts".
	It may be that even for those in the high-risk category, it is still advisable in some cases to save, but theywill need very clear information to help them make informed decisions about whether they should stay in or opt out of personal accounts.
	What worries me most about personal accounts, and this is where the generic financial advice point comes in, is that many people today are chronically indebted, if I can put it that way. The statistics on the number of people who fail to pay off their credit card balances each month are horrific; I believe it is something in the order of 40 per cent. Those people are at serious financial risk because the real interest rate on credit card balances is well up in the teens at a time when realistically, over the long term, no one can expect a return of more than the middle to high single figures in real terms on their long-term investments. Even when additional employer contributions and tax relief are allowed for, for most people it is still a bad bet to be making pension savings on the one hand and paying high-teens interest rates on their credit cards on the other. That is why generic financial advice is so critical. The Resolution Foundation's briefing is very helpful on that.
	I want to press the Minister, as my honourable friend David Laws and I have pressed James Purnell on a number of occasions, on how the advice is going to be delivered. I know that a working party is looking at it, but time is pressing and we really want to see an indication that Ministers are aware of the scale of the problem. Again, I stress from these Benches that when delivering generic financial advice, it is much better to build on a trusted brand. Here I suggest in particular the citizens' advice bureaux, a brand people know. Integrated debt and pensions advice centres could be developed alongside the bureaux, building on their system rather than trying to design an entirely new structure.
	The reason why we propose that this report should be from the Personal Accounts Delivery Authority rather than from the Secretary of State or an independent commission, as later amendments suggest, is that as the authority is designing and delivering these products, it is absolutely vital that it knows exactly what its consumers' needs are. That would be a proper, consumer-based approach. I beg to move.

Baroness Noakes: I have tabled an amendment in this group. We support the principle behind the amendment of the noble Lord, Lord Oakeshott. Information of the nature indicated in the amendment is important and we too are concerned about the impact of means-testing on how personal accounts will develop in practice, and it is extremely important to ensure that the personal account scheme is designed as far as possible to avoid mis-selling, an issue to which I will return in later amendments. My Amendment No. 120 is grouped with Amendment No. 111 because it deals inter alia with financial advice, also covered in the noble Lord's amendment.
	Amendment No. 120 seeks to introduce a requirement for the delivery authority to ensure that it supports objectives for the scheme of access to information and financial advice. It is somewhat less ambitious than the Liberal Democrat proposal in relation to advice. I agree fully that there are great dangers of mis-selling involved in personal accounts, but I am not clear what the answer is on how financial advice should be delivered, and more importantly, who is to bear the cost. At Second Reading I said that I was sceptical about generic advice being an adequate solution, and I look forward to seeingthe work being undertaken for the Treasury byMr Thoresen, but I remain to be convinced thatthere is a satisfactory generic advice solution tothis problem, one which relies so much on the circumstances of individuals. I am also concerned to ensure that no public subsidy is made available for advice on personal accounts because that would upset the level playing field with other savings products, which in effect have to bear the cost of advice. I am not sure that we sign up to the free element of the amendment of the noble Lord, Lord Oakeshott, unless he means free to the individual but borne as part of the overall costs of the personal account scheme. I can see that charging individuals would not work, but there would be a problem if we expect to see these costs being borne by the public purse. That would be unfair, but if they are loaded on to the costs of the scheme, what will they do to the overall economic returns available to it?
	I shall mention briefly the other part of Amendment No. 120. It covers access by both individuals and employees to information on rights and responsibilities under the scheme. It is goingto be hugely complicated for both employers and employees. So far as employers are concerned, those at the smaller end of the business scale, which in numerical terms comprise by far the largest group, will find this very difficult to apply. We must ensure that the scheme is designed so that proper information is available on websites and in written form; that is as important as ensuring that advice is available to those entering the scheme.

Lord Blackwell: I support the issue raised by both these amendments on the advice scheme. It is a key part of the proposed scheme that advice is available to people at an affordable cost. In the past, the major impediment to selling pension schemes to much of the population has been the cost of advice relative to the amount to be invested. The scheme for extending pensions to more individuals seems to rest on the assumption that we can create a low-cost generic advice scheme. I, among others, have expressed scepticism about the extent to which the notion of generic advice is feasible. As soon as you get intoan individual situation and deal with a range of circumstances, benefits and debts, it is questionable whether generic advice will be sustainable or whether you will get driven into providing individual advice that deals with those particular circumstances. As soon as you are driven into giving individual advice, you are bound to end up with a costly advice process.
	Before we go much further in the next Bill into the development of the scheme, we should have an early discussion on practical proposals as to how the proposed generic advice scheme is going to work, and satisfy ourselves that it is plausible and that it is not going to disadvantage pension providers outside the state scheme, as my noble friend Lady Noakes said.

Baroness Greengross: I also support the amendment. I declare an interest as president of the PPI and a trustee of the Resolution Foundation.
	It is perfectly possible to give this kind of advice, but I dislike "generic" because I think that the word is misleading. It is advice which, in many ways, is cautionary and will stop people making mistakes.As has been mentioned, the Resolution Foundation proposal deals with people primarily who are in work but earn less than average earnings. These people are very vulnerable. In this country there is always a group just above benefits which suffers. It is inevitable with tapers and so on that you will get a group of people who have got a little too much to receive benefits of any kind. These people are very much in need of advice but tend not to go to IFAs. I agree with my noble friend Lady Howe; I hope that any scheme could work through organisations that have done a great job in giving people advice so far—of which there are many in this country, particularly the CAB—but we will have to wait for the outcomes of the review to know exactly how it would work. However, there is a very strong case for this kind of advice and the amendment would ease the way to ensure that it happens.

Lord McKenzie of Luton: I thank all noble Lords who have spoken on the amendment. It has given us the opportunity to discuss two issues: the return which individuals can expect from saving, and the provision of financial advice. I expect I shall disappoint noble Lords in not being able to provide some of the detail at this stage that people are seeking, but I hope I can satisfy them that work is in hand which is directed in the right way and will produce the kind of information they reasonably seek.. I understand the concerns that have led to both amendments being tabled and I agree that the matters are important and appropriate subjects for public debate. However, I cannot agree that it is either necessary or effective to amend this legislation on the Personal Accounts Delivery Authority in order to achieve the desired outcome.
	Amendment No. 111 proposes that the Personal Accounts Delivery Authority should be required by December 2007 to produce reports on the returns to savings for individuals and the provision of generic financial advice. Such activities are not appropriate for the authority in its initial phase. The Bill sets up the authority initially to act as an adviser to government, and this amendment would place an unnecessary extra pressure on the delivery authority in its initial phase by requiring it to carry out an extensive and complex analysis in a short space of time and to duplicate work already being undertaken in other areas.
	The department has already published a detailed analysis on possible returns, particularly in Financial Incentives to Save,which was published alongside the Bill. This topic has also been the subject of some debate during the passage of the Bill. The analysis shows that the large majority of those eligible to be automatically enrolled can expect to benefit from saving in a personal account or exempt scheme. Many long-term savers, including many who may be entitled to some pension credit in retirement, could expect£2 plus inflation for every £1 they contribute. Of course, as with all investments, this will depend on stock market returns and other risks.
	We are continuing to develop this analysis of incentives to save and how particular levels of payback could be expected by different groups. The Pensions Policy Institute independently conductsan analysis in this area, and it would place an unnecessary burden on the delivery authority in its very initial stage to require it to do the same.
	Amendment No. 111 also refers to generic financial advice, an issue which is the focus of Amendment No. 120. Let me, therefore, turn to that matter. In our White Paper, Personal Accounts: A New Way to Save, we recognise that providing good-quality information will be critical to the success of personal accounts. Advice on saving for retirement is specific to individuals and is regulated by the Financial Services Authority. The personal account scheme, like many other schemes that operate automatic enrolment, is being designed so that regulated financial advice is not required, but that does not mean that people will not have the right information.
	The noble Lord, Lord Blackwell, is right: regulated financial advice is expensive and has deterred people from entering into fairly modest pension arrangements. It is a key part of the design of personal accounts to address that issue. We recognise that individuals will need information to enable them to make decisions regarding their participation in the scheme—for example, on deciding levels of contributions, fund choices and on whether they should opt out—but it will be for the delivery authority to determine the information strategy for personal accounts. It is recognised that individuals and employers should have information to enable them to understand their rights and responsibilities. In deciding how this information should be provided, the delivery authority will need to take account of the target group.
	A number of noble Lords recognised that Otto Thoresen is conducting an independent review, and we should await its outcome before we discussin more detail generic financial advice and how it will impact on personal accounts. It is a very important task he has under way.
	In summary, I suggest that noble Lords can be assured that the matters with which the amendments are concerned will be properly dealt with, and that it is neither necessary nor appropriate to make them the subject of additional legal obligations on the Personal Accounts Delivery Authority. I therefore urge the noble Lord to withdraw his amendment. Further, in relation to the analysis of returns on savings and the effect that may have on different groups, we are continuing to develop our analysis of the size of the groups that might expect particular levels of payback. That is, as I think noble Lords will acknowledge,a complex area that requires information about individuals' characteristics over 60 or 70 years. We are hoping to release the results in the autumn, so that is very much work in progress.
	I hope that has assured noble Lords that we accept that the issues have been raised are relevant, important and serious, and that work is in hand to address them. It would be wrong, however, to deal with them in the way that the amendments suggest.

Baroness Hollis of Heigham: In moving Amendment No. 112, I shall also speak to Amendment No. 115.I have some hesitation in speaking to these amendments now, because they should probably have been grouped with the previous two. I deliberately did not come in on that group, but there are some seriously overlapping issues. These amendments focus much more specifically on gender, but the broader issues are, on the one hand, the need to collate information and the question of whether that should be done by the department or the authority, and, on the other, how that should in turn feed through into advice and whether that should be generic or regulated. On the issue of advice, I declare that I am a board member of the Pensions Advisory Service, which gives pro bono advice in a very admirable way to people in need of some steer on their pension futures.
	I will not press the amendments, but first it is worth speaking to them briefly in order to emphasise some of the more distinctive aspects of the gender points. The arguments have already been made about banking. I want to speak about this because in 2002, when we issued the White Paper on pensions, some of us had to fight to have a chapter in there at all on women's pensions. The Government have since accepted that concern and the issue has now been mainstreamed. On the back of the admirable report of the noble Lord, Lord Turner, the DWP rightly and properly responded to a request from my honourable and learned friend in the other place, Vera Baird, for a gender impact assessment of the Bill. For all of us, it has been fascinating bedside reading, interspersed with the regulatory impact assessment. It has been immensely valuable in collecting the statistics and trying to "forward gaze" to where certain assumptions can take us, if they are robust and prudent.
	As we move now into personal accounts, something similar is needed. I am genuinely open-minded about whether the delivery authority is the right body to produce that or whether the DWP should be doing it on the back of the delivery authority, but it needs to be done so that we can make intelligent recommendations, in the light of the Thoresen review, about how we can take forward generic or regulated financial advice. That is essential.
	It is worth emphasising that pensions do not sit comfortably in the narrative of most women's lives. For most men, particularly once they come close to median earnings or above—provided that they do not have some of the problems mentioned by the noble Lord, Lord Oakeshott, such as major credit card debts—pensions are a no-brainer, particularly with an employer contribution. That is simply not true for women. Think of the underpinning that is going on. To have a decent pension pot, particularly a DC pot, you need to start saving early, at just the time when most women are likely to start a family. You need to save enough, with the percentage growing as your income grows, yet women's income peaks at age 28 and then declines. You need to have an employer's contribution to make it worth it, yet women are disproportionately either in small firms with no employer's pension scheme or in schemes that are shell stakeholder pensions—outside the public sector, that is. You need to do that for 35 years or so and not touch the money, and yet, as Scottish Widows has shown, nearly half of all women stop saving into a pension when their first child is born. You need to lock it away for 35 years or so, yet divorce, illness and financial pressures all make it seem, to many women, selfish to save. Finally, as has been mentioned, you need to ensure that it is worth doing, which means floating free of deductions so far as the interlocking benefits system is concerned. Almost none of those considerations affects the judgment of most men over whether they will enter a pension scheme, but they will affect the judgment of most women over the same question, particularly if they are substantially below median earnings.
	Some of those risks are man-made—literally so—and some are God-given, but they impact differentially on women. Personal accounts, as constructed by the noble Lord, Lord Turner, have made a seriously gallant start to addressing the positions and problems that women find themselves in. The opt-out scenario, the greater portability and the limited vesting period all make continuous saving simpler, more attractive and carried by the power of inertia.
	Compulsory provision for employers suggests that the two-for-one scenario would help to encourage women into the scheme. I hope, incidentally, that we will take some action to ensure that women are not encouraged by employers to opt out. I also hope that, with a higher annual contribution ceiling of £5,000 rather than £3,000, small legacies and lump sums may be introduced to smooth the periods when women are not in the labour market. We may need to do more work on the seamlessness of pensions savings during job mobility.
	Then we come to the overlap with AmendmentNo. 115. A third of the target group for personal accounts are likely to be women earning between £5,000 and £15,000 a year—perhaps 3 million women. Let me give one example of why the risks are so gender-different for women in terms of personal accounts and why both a statistical overview and advice, as proposed in Amendments Nos. 112 and 115, are so necessary.
	Let us take a woman on half median earnings of £10k a year who comes back into full-time work at 45. She and her employer pay in 8 per cent. The question is: should she? Her pot 20 years down the line at retirement will probably be worth about £37,000, given prudent assumptions, or about £40 a week gross. But net, as was indicated in the previous debate, that £40 could be worth £40 net right down to £5 net more than she would otherwise get from the state. Would it be worth it? Not if she has an incomplete basic state pension, because for that bit that it is incomplete, she will lose it pound for pound; not if she rents, because she will probably lose 90p in the pound; and not if she is in pension credit potentially, when she will lose 40p in the pound. It would possibly not be worth it if she had no other savings and would therefore have got guarantee credit. It would possibly not be worth it if she were single and would not be floated off pension credit by a partner. It is certainly not worth it if she is likely to have caring responsibilities in the future that will reduce her hours and her pension payments.
	A lot of these risks cannot be predicted; she cannot foretell them. It will be very difficult to give appropriate advice, but some advice can be given. We need to ensure that we are continually auditing the situation in which women find themselves through annual reports. Whether such information is fromthe delivery authority or the DWP—I am genuinely open-minded—it should be transparent, available and in the public domain. On the back of that, we should try to constitute arrangements for financial advice so that, all things considered, she is making the most prudent judgment that she can about whether she opts out.
	I apologise to the Committee for repeating anything that was discussed in the previous group of amendments. However, there are specific issues facing women over and beyond what most men will face, which are worth drawing to the attention of the Committee. I beg to move.

Baroness Thomas of Winchester: We strongly support the amendments, as does the Equal Opportunities Commission. I fear that I shall probably say exactly what everybody else has said for the past half-hour, but it is worth repeating.
	On Amendment No. 112, the gender impact assessment published with the Bill is very welcome; it gives a good lead to other Whitehall departments that are involved in issues where the different needs of women and men need to be highlighted. As has been pointed out throughout the Committee stage and just now by the noble Baroness, Lady Hollis, women's working lives and earning patterns are very different from those of most men. It is vital that the design of personal accounts is flexible enough to take account of this, especially because, as my noble friend Lord Oakeshott said on the previous amendment, it is estimated that 43 per cent of all female employees are low to middle earners, earning between £5,000 and £15,000 a year. We need to know, for example, about those people who could lose out because of the interaction of means-tested benefits in retirement by saving in personal accounts. The amendment hasa clear link to Amendment No. 115, which would require,
	"a report on the information and advice needs of women and men in relation to",
	personal accounts.
	The challenge has been well highlighted by the Resolution Foundation; it is to strike the right balance between presenting people with information and explaining their options, and encouraging them to remain opted in or suggesting that they opt out. It is clear that a good deal of work has been and is being done on this area, as the Minister said. I understand that we do not yet know how this advice will be delivered, as it is work in progress. The questions are clear. Should it be by telephone only? Should it be by letter? Should it be possible for people to have face-to-face interviews, as in a citizens advice bureau? I would like all these options to be available, but particularly for any advice to be written down in a clear format in easily understood English and—dareI say it?—written by a woman. As we have heard before, the whole pensions system is man-made rather than woman-made, and the balance needs to be redressed.
	I was going to ask the Minister how the Government were going to take forward the whole question of information and advice, but we have already been told that. Are the Government in close contact with Citizens Advice, whose bureaux bear the brunt of most financial advice at present?

Baroness Morgan of Drefelin: I thank my noble friend Lady Hollis for not withdrawing the amendment before we had a chance to discuss it. Itis worth while continuing the debate on women's pensions at almost every appropriate moment. My noble friend rightly highlighted two important issues—the need to conduct a gender impact assessment of the personal accounts proposals and the provision of information and advice appropriate for both women and men.
	When publishing our White Paper Personal Accounts: A New Way to Save, we recognised the importance of enabling both women and men to save for retirement. We also recognised that providing good-quality information would be critical to the success of personal accounts.
	The EOC has rightly acknowledged that personal accounts have the potential to help to deliver a decent income in retirement for millions of people by enabling more women to save, and at a lower cost. In the regulatory impact assessment that accompanied our White Paper, we set out what I stress was a preliminary gender assessment, which included our estimates for eligibility for automatic enrolment. As we have just heard, these indicated that an estimated 43 per cent of those eligible would be women, which equates to between 2.2 million and 3.4 million female employees.
	As my noble friend is well aware, our intention is to introduce a further Bill later this year, subject to the will of Parliament. I can reassure her that that Bill will be accompanied by a full gender impact assessment. This will include an assessment of the full proposals for personal accounts. In addition, legislation requires all public bodies to comply with a gender equality duty, and the authority will fall under that duty.
	Amendment No. 115 would require the delivery authority to produce a report on the information and advice needs of women and men within the first year of establishment, long before personal accounts are launched. We recognise that individuals will need information to enable them to make decisions about whether to participate in occupational pension saving if automatically enrolled, and on levels of contributions and fund choices. Advice on saving for retirement is specific to individuals and is regulated by the Financial Services Authority.
	The personal accounts scheme, like many others that operate automatic enrolment, is being designed so that regulated financial advice is not required, as we said when debating Amendment No. 120. But that does not mean that people will not have the right to information.
	We also recognise that different parties, which is what this discussion is about, will require different information and that information needs for women and men vary, depending on their circumstances. I think that the phrase is "depending on their messy lives", which has been coined during the passageof the Bill. Indeed, the DWP's research paper The Gender Impact of Pension Reform indicated some evidence that women may lack confidence in their understanding and knowledge of pensions. This is a very important concern.
	It will be for the delivery authority to determine the information strategy for personal accounts. In providing this information, the delivery authoritywill need to take account of target groups and their circumstances.
	The authority will fall under the auspices of the gender equality duty, and a gender impact assessment will be carried out by the department. Noble Lords may be interested to know that that duty also requires the authority to produce the gender equality scheme, with the aim of that scheme being implemented in three years. Under the duty, there is a requirement for the authority to report annually on progress against that scheme, which I thought was an interesting point for this discussion.
	The noble Baroness, Lady Thomas, talked about working with stakeholders, particularly citizens advice bureaux. The DWP is committed to working closely with stakeholders, particularly stakeholders with such significant expertise.
	I hope with that my noble friend will consider withdrawing her amendment.

Baroness Noakes: We come to a seriesof amendments designed to ensure that when the delivery authority gives advice to the Secretary of State or prepares for implementation—the two things set out for it in this Bill—it focuses on the right things. I am sure that the Minister will say to all the amendments that we are about to discuss that this is not the Bill in which these issues should be debated and that we should wait for the next pensions Bill, which will enshrine the Government's proposals. Although we accept that detailed legislation for personal accounts will have to await a later Bill—and we look forward to that—we believe that, as the authority goes about its tasks under this Bill, it should be guided by some clear objectives and principles set out for it in statute; otherwise, the delivery authority would be operating in something of a vacuum with no guiding principles to assist it when it is considering the Secretary of State's proposals or undertaking its implementation preparation.
	In this and several of the other amendments to which we shall come, we based our amendment wording on the remit that the Government themselves said they would set up for the delivery authority. There was an explicit commitment at paragraph 84of the White Paper, on personal accounts, that the objectives for the delivery authority would be set out in statute. That seems to have escaped the notice of parliamentary draftsmen, so we hope that these amendments will be accepted by the Government as the constructive way in which to give effect to the Government's intentions.
	Amendment No. 113 gives the delivery authority an objective for its work of,
	"continuation or creation of personal pension schemes or occupational pension schemes which provide for higher levels of contribution or higher levels of benefits",
	than those from personal accounts. Put simply, the delivery authority must ensure that when it advises the Secretary of State on the proposals, it does so from the perspective of not squeezing out private provision or triggering a levelling down in the private sector.
	I do not think that personal accounts will have much of an impact on defined benefit provision in the private sector, because there is not much of it left. A Written Answer from last month showed that only1 per cent of employers now have defined benefit pension arrangements open to new members and only 8 per cent of the private sector workforce were active members of an open defined benefit scheme in 2005. So that is not the focus—it is a thing of the past. However, personal accounts could be used by those currently operating defined contribution schemes, because the employer could find it was less hassle and cost if it simply encouraged employees into the personal accounts system—and that was an end of it.
	The Minister's department has pointed in the past to research indicating that employers are not very likely to level down, but the ABI commissioned research showing that one-quarter of employers contributing more than 3 per cent would introduce a new lower rate of contribution. Levelling down may not happen overnight, but the cumulative effect of people changing jobs into a lower provision offeredto new employees could be very significant overtime. Similarly, if we look at new employers setting up—and it is a feature of the economy that new businesses are always being set up—what is the likelihood that those employers will do anything other than the bare minimum as set out in the personal accounts scheme?
	I see no easy way in which to prevent levelling down in either of those circumstances—that is, for those in existing defined contribution arrangements or from new employers—but the dangers of that need to be fully recognised by the delivery authority when it considers the Secretary of State's proposals, offers its advice and prepares the detailed plans for implementation. That is why we think it very important that this should be brought firmly to the attention of the delivery authority as it carries out its work by hardwiring it into the Bill, as my amendment proposes. I beg to move.

Lord Turner of Ecchinswell: I am sympathetic to the aim of the amendment, which is to ensure thatthe concerns about levelling down are appropriately focused on in government. I am less convinced that it is necessarily a responsibility of the delivery authority itself.
	We should keep the importance of preventing levelling down before us, but also in context. The fact is that 56 per cent of the private sector workforce have no provision other than that provided by the state,so we want to ensure a balance between bringing that 56 per cent up to some minimum level and the danger that there might be a levelling down of a subset of the 44 per cent towards the new standard level. It is important to realise that it is quite difficult, within the design of the national pensions saving system, to avoid that danger, which is not created by the specific administrative arrangements of the scheme—by whether it is organised, as the ABI wanted, through insurance companies, or, as the NAPF wanted, through competing trusts, or, as the commission proposed and the Government are taking forward, through an overall national agency. The danger is created not by those particular choices but by the actual declaration of what is an absolute minimum standard. The moment we say that the absolute minimum the employer must do is to put in its 3 per cent—if people accept automatic enrolment and pay their 5 per cent—in itself creates the danger of levelling down.
	It is incredibly important to try to prevent that levelling down. The commission thought about the levers that might prevent that—first, in maintaining a significant element of tax relief incentive towards the provision of pensions beyond the minimum. That is a separate issue from the one which I knew the noble Lord, Lord Oakeshott, would mention if I did not—the allocation of tax relief between different people—but certainly the overall existence of tax relief is very important. Secondly, it is very important better to communicate to individuals and companies just how generous tax relief is, and that it applies not only to income tax but to the favoured treatment of employer's national insurance when you pay someone through an employer's pension contribution rather than through cash wages.
	The levers which we could think of for ensuring that there was not levelling down were the preservation of the existing generosity of tax relief and of employer's national insurance relief together with a programme of communication to employers and employees to ensure that they are convinced that being paid in pension contributions rather than cash wages is a sensible thing to do. I think that thoseare very important objectives. I am just not totally convinced that they are objectives that would be pursued by the delivery authority of the national pension savings scheme itself rather than by other wings within government.

Lord Blackwell: This is a very important amendment, but first I should remind the Committee of the interests that I declared on Second Reading. I pick up from where the noble Lord, Lord Turner, ended. It is important to lay down this type of amendment now so that the authority, in doing the preparatory work which we expect it to do over the next few years, is very clear about what the objectives will be by which its success or failure is judged. My fear is that, if we are not careful, we could have a pension authority that, a number of years hence, declares the great success of its scheme in terms of the number of people who have been involved in personal pension accounts but takes no notice and scores nowhere in its target the fact that a very large proportion of those—and in the worst case, all of those—have come about simply by switching people from better schemes into a less good one because of subsidies, the mechanism of advice or the cost structures that have been put around it.
	Therefore, right from the beginning, we have to be very clear about the goalposts by which we wantto measure the scheme's success and which the preparatory work should be setting out to achieve. For that reason, it is important that this is built into the primary legislation.

Lord McKenzie of Luton: This has been an interesting debate. The noble Baroness, Lady Noakes, and I think the noble Lord, Lord Oakeshott, anticipated what I was going to say at the start ofmy response, and it will run through the other amendments—that I do not think that particularising these objectives in this Bill is the right way to go. When we move on to the second Bill, it will be important that the objectives are set out. As for the parameters under which the advisory work of the delivery authority will be done, we have publishedour White Paper, which has been the subject of consultation, and our response to that consultation is to be published imminently. I think that that will clearly set out the Government's objectives for the delivery authority. But I emphasise that we see personal accounts as complementing and not competing with the rest of the market.
	A number of points have been made about levelling down. As the noble Lord, Lord Turner, said, the delivery authority itself is limited in what it cando in encouraging people to the rest of the market. However, if you look at the structure of what is proposed for personal accounts, I think that you can see in some regards why it will complement and not compete. The proposed measures will limit the effects of personal accounts on existing occupational provision. We have the prohibition on transfers, the limit on contributions and the simplicity of the exemption criteria. I suggest that all of those serve to ensure that personal accounts do complement rather than seek to replace existing provision.
	It is absolutely right that we encourage people to recognise what a good mechanism the pension tax regime is for retirement saving. We will come on to that issue in a subsequent amendment. Another important point on which the Pensions Commission placed great stress is the issue of salary sacrifice and what it means in terms of national insurance. I am not entirely sure that that point filters through generally. It is something that one should continue to promote.
	We should also encourage employers to promote the benefit of good-quality pension schemes. We will have in due course a debate on public sector pension schemes. We should want employers to have good-quality schemes as they are a competitive edge for them. Certainly the research done for the DWP shows that the risks of levelling down are not as great as some might suggest. However, we have to be mindful of that. What is important is that we do what we can to make a success of personal accounts within the parameters that we have defined.
	Fundamentally, on this amendment and the amendments that will follow it, we do not think that it is the right time to specify in this Bill—the first Bill—what those objectives are. However, at each point that an amendment is discussed, I am happyto put as clearly as I can on the record wherethe Government are coming from on that. I do that again by reiterating that we see personal accountsas complementing and not competing with the generality of the market. I talked to the ABI and think it was keen to help us understand and to ensure that the consumers of these products understand the range of pension provision out there, which runs through a whole spectrum from defined benefit schemes to defined contribution schemes, with hybrids between the two concepts where some of the investment risk is borne by the beneficiary and some is not. There is an important education issue generally around that. However, I believe that, as personal accounts are proposed to be introduced, they genuinely will complement rather than compete with the rest of the market. It is in all our interests to ensure that both flourish.

Baroness Noakes: I thank the Minister for that reply and other noble Lords who participated in the debate. I think that I thank the noble Lord, Lord Oakeshott, who said he thought he knew what the Minister was going to say, and thought that he agreed with it. So perhaps I do not welcome what he contributed to the debate.
	I fully accept what the noble Lord, Lord Turner, said—that it is difficult to see this as a responsibility of the delivery authority—but I think that the point was effectively met by my noble friend Lord Blackwell, who said that unless the delivery authority has these issues in mind, we will suddenly get a personal accounts system that will in effect not have paid enough attention to these issues. That may be more easily seen in some of my later amendments rather than this one, where the noble Lord, Lord Turner, is suggesting that it is really only the Government who can do anything about the issues.
	The Minister said that the Government see personal accounts as complementary, not competing. I have to say to him that that is fundamentally naïve. This system will be in competition with the other forms of pension provision, like it or not. It may not be cut-throat, red-in-tooth-and-claw competition from day one, but over time it will become an alternative that makes itself more attractive to the various types of employers which I ran throughwhen I introduced my remarks. Using the term "complementary" rather than "competitive" does not make it any less likely that levelling down will happen.

Baroness Hollis of Heigham: I absolutely accept the noble Baroness's figures—83 per cent of stakeholder schemes were shell schemes. The point I was making, which I do not think she addressed, was about the levelling down principle, which she mentioned, and the minimum standard becoming de facto the standard standard, if I may put it that way. We already have the experience of stakeholders in non-shell schemes. Employers could have used such schemes as an alternative to the more generous DC or DB schemes they had, but they did not. They didnot level down for those schemes where they were making a contribution. I do not challenge the noble Baroness's statements about shell schemes at all—I would be the first to agree about that precisely because they did not have an employer's contribution—but we have a precedent which does not support what she is saying.

Baroness Noakes: I shall speak also to Amendment No. 117. Both these amendments have as their motivation the need to reduce burdens on business.
	Amendment No. 114 proposes that the delivery authority should seek to ensure effective co-operation between the Pensions Regulator, the Financial Services Authority and the Secretary of State. The amendment is particularly important given the Government's decision to accept the conclusion of the Thornton review that the regulatory structure affecting pensions should not be changed.
	Amendment No. 117 is the broader of the two amendments in the group since it requires the delivery authority to minimise burdens on employers. The NAPF estimated only last week that the personal accounts system would add £2 billion a year to the cost of providing pensions. This is not a trivial sum and could well impact on the level of provision that employers are prepared to offer.
	The way in which the new scheme is designed—this is relevant to the delivery authority, which will be involved in preparing the scheme for implementation—can have a big impact on employers and the delivery authority has to have that in mind as it makes its preparations or gives advice. For example, there are bound to be record-keeping or inspection requirements and they need to be designed in a proportionate way and not, for example, on the premise that all employers are set upon non-compliance with the rules.
	In addition, the design of the transition from existing systems to personal accounts and waiting periods will have a very direct impact on employers. Small businesses could be very hard hit by those arrangements.
	Much of the burden on employers will be regulatory in nature. Since there will be competing regulators which will need to co-ordinate when the scheme is up and running, the design must ensure that that co-ordination is maximised. For example, if information returns are required under the scheme—which there will be all over the place—we need to ensure that the employer is asked for information once only in a way that will meet the needs of all who are likely to use it. For those reasons we think that the burdens on business—I refer to my AmendmentNo. 122, if not Amendment No. 114—ought to be set in the statute so that the delivery authority will properly give attention to those issues as it carries out its work. I beg to move.

Lord Oakeshott of Seagrove Bay: I speak to these amendments and the series of amendments the noble Baroness is moving about the objectives of the delivery authority. These are probably unnecessarily detailed. I am not sure, operationally, what guidance in practice the delivery authority is meant to deduce from them. I am not sure how they are meant to work. It is not appropriate to include them in the Bill. I say to the noble Baroness, Lady Noakes, that the main reason that stakeholders did not work and did not minimise burdens on employers was that they were much too costly. They were not an attractive option, which is why levelling down does not apply,as we discussed. In general, I do not considerthat, operationally, these amendments take us much further forward. I should have thought that what the Minister said about the undertakings he is giving and the discussions in both this and the other place would be sufficient.

Lord McKenzie of Luton: The noble Lord, Lord Oakeshott, pre-empted the thrust of my reply but I shall give it anyway. We are invited to consider two matters: first, the extent to which the delivery authority will liaise with established pensions and financial bodies; and, secondly, how we intend to ensure that the personal accounts scheme is designed in a way that minimises the burdens on employers.
	As regards the first amendment, the Bill does not specify with whom the authority should consult. This is to allow the delivery authority to co-operate and consult with whomever it thinks appropriate. It is a matter for the authority's discretion, based on the expertise and experience of its members. We drafted the Bill in this way intentionally to allow the members of the authority to consult with all interested parties. I would expect the delivery authority to build effective co-operation with a number of bodies which can advise on financial, commercial and operational consequences. It would be an integral part of the successful development of personal accounts. Therefore, it is hard to imagine that it would choose to operate without the benefit of a good working relationship with the Pensions Regulator, the Financial Services Authority and, of course, the Secretary of State. I am sure that the authority will need to consult a number of other organisations as well, including experts in the pensions and finance industry.
	On the second amendment, we do not underestimate the important role of employers in ensuring that our reforms are successful. We recognise that the introduction of personal accounts willplace a burden on some employers, in the costsof additional contributions, the administration of automatic enrolment and the payment of contributions. I will explain how we intend to minimise the impact. Looking first at contribution costs, the White Paper that we published in December set out our proposals for helping the smallest businesses to cope with any increased costs. Those proposals include phasing in contributions to personal accounts, providing assurance on the 3 per cent level of employer contribution by setting it in primary legislation, and providing a five-year lead-in before contributions start in 2012. We intend to legislate for those proposals in the planned second pensions Bill.
	We committed in the December White Paper that minimising the administrative burden on employers would be a guiding principle in the development of personal accounts. We recognise that it is important to base the design of the administration on good estimates of the administrative costs to employers. Following the publication of the White Paper andthe accompanying regulatory impact assessment in December, we invited views on the processes and underlying assumptions that underpin our estimates. We also set up a cross-government group of experts to work together on refining the assessment of the cost impact on employers. We will publish our revised estimates as part of the regulatory impact assessment accompanying the proposed second Bill.
	I recognise that the noble Baroness, Lady Noakes, wishes to probe the objectives for the delivery authority, and she has sought to require the authority to ensure that its actions and advice support the objectives of minimising the burdens placed on employers as a result of the personal accounts proposals. Noble Lords will be well aware that the purpose of the Bill is to focus on preparing forthe delivery of the personal accounts reform. The Government will continue to set the policy framework for personal accounts. In so doing, we will continueto balance the need to minimise employer burdens with the need to address undersaving, by delivering a low-cost scheme that complements the wider pensions market.
	In the light of that, it would serve no useful purpose for the authority to be additionally required in this legislation to ensure that its actions and advice minimise burdens on employers. I have made clear our intent on taking this forward.

Baroness Noakes: I thank the Minister for that reply. I know that he will say the same thing on all the amendments; I am expecting that. I remind him that Clause 20(1) says:
	"The Authority may do anything it thinks appropriate for preparing for the implementation of, or for advising on the modification of, any relevant proposals".
	Clearly, the authority has to have some framework within which to decide whether to do "anything", otherwise "anything" could mean anything under the sun. The amendments are trying to set an appropriate framework within which the authority should work. The Minister suggested on the previous amendment, "It kind of knows what we are about because it can read all the stuff". If we were setting up an authority to do things, we would give it objectives; it is curious that, just because it is set up to prepare for doing things, it does not have similar objectives. I am not going to repeat that on every group of amendment, because in some ways the Minister has said that we are on the same page in the outcome sought. It is worth rehearsing those issues, because we think that it is important that the delivery authority has those issues firmly in mind. We can have it recorded in Hansard that the Minister also thinks that it is important. I beg leave to withdraw the amendment.

Baroness Noakes: Amendment No. 116 is about the delivery authority considering the impact of its work on savings. I shall also speak to Amendment No. 122.
	Amendment No. 116 gives as an objective of the scheme that there is an overall increase in the number of people saving and the overall amount being saved; and both are important. There has been a significant reduction in the savings ratio since 1997. Other economic conditions, such as the squeeze on disposable incomes, are making it more difficult for people to save. Increasing savings in general will not be easy, and increasing savings into the personal accounts vehicle, which locks up funds until retirement, will be difficult.
	The second leg of the amendment is to maximise participation by the groups of individuals targetedby personal accounts. We debated the targeting of groups under Amendment No. 111, tabled by the noble Lord, Lord Oakeshott, and AmendmentNo. 112, tabled by the noble Baroness, Lady Hollis. It is clear that certain groups will not benefit from being enrolled in the scheme, and perhaps the amendment ought to have been drafted the other way so that the objective is to ensure that non-target groups are not unduly enticed into the scheme, to prevent mis-selling. But the scheme, to be successful, will want to attract some key groups who have no or insufficient private pension provision and whose financial circumstances mean that they will benefit from enrolment and saving. All that my amendment is doing is making sure that the delivery authority is focused on those groups and making it work for them; the converse being that it positively tries to ensure that the savings scheme is not there as a lure for the groups who should be targeted out of personal accounts.
	The third leg of the amendment is that there is no unfair competition with other savings products. There are a number of strands to that, one of which is the proposed investment cap of £5,000, which is much higher than the Pensions Commission's proposal of £3,000. I do not want today to debate the correct level of cap, which can await the next Bill, but I do want to explore with the Minister whether the Government believe that the personal accounts savings product should be aiming to mop up most of the existing pension savers.
	The ABI has estimated that over 90 per cent of existing savers will come within the net if the cap is set at £5,000. When the Minister in another place was asked in February whether the Government agreed with that analysis, he said that he had not seen any analysis on the point. That was four months ago; I am sure that the Minister can give an answer, and I would be grateful for it.
	Of course, the existence of personal accounts may not lead to unfair competition, though the sheerscale of it may be setting up some hidden barriersto competition, as other providers may not have sufficient scale to compete for additional savings above the amount that will have to go into personal accounts. That is why it is important for the delivery authority to have competition in mind. The scheme could be set up in a way that made it difficult for new entrants to the savings market to satisfactorily address the market.
	Amendment No. 122 deals with the related issue of how the costs of setting up and operating the personal accounts scheme are to be met. We discussed public subsidy briefly in the context of advice, but this is in the context of the scheme overall. Charging mechanisms need to be set up, and they will be designed during the initial phase, to recover the costs. That is what the amendment seeks to do.
	In the short term, as the delivery authority prepares for implementation, it will be funded by grant in aid, but some of that money will be used to prepare for implementation, such as tender costs, which should be part of the cost of the whole scheme of personal accounts to be recovered at some point. The amendment is intended to ensure that the preparatory costs are not lost sight of but are recovered as part of the personal accounts scheme. Even though they happen to be in the category of grant in aid for a delivery authority that will not exist in the long term, they are still part of the overall cost of the scheme and ought to be taken into account. I beg to move.

Lord McKenzie of Luton: If my officials have a detailed answer to that before I sit down, I am sure that a note will wend its way to me from the Box. If it does not arrive by the time our discussion on this amendment concludes, I will write to the noble Baroness. I think that it will be covered in our response to the consultation document, but to the extent that it is not, I will ensure that she receives a full reply. I do not have the specific information that she seeks.
	We do not believe that personal accounts will represent unfair competition to other savings products, because it will be designed as a basic, defined-contribution pension scheme, with limited investment choice and no added insurance features. Further, the restriction on transfers and a limit on contributions will target the scheme appropriately and allow scope for the rest of the pensions market. More widely, pre-existing pensions products should also benefit from the introduction of automatic enrolment and minimum employer contributions.
	We intend that the personal accounts scheme be self-financing in the long term through money recovered from membership charges. However, there will be a need to provide for the set-up in the short term. I am sorry to sound like a gramophone record, but financing further forward will be a matter for the detail of the second pensions Bill.
	My honourable friend James Purnell has made it clear that initially the funding of the authority will be grant in aid. We will discuss the extent to which any of that initial phase becomes rechargeable, depending on whether it is for the cost of the initial advice or for setting up and implementing the scheme, as part of the second Bill.
	On the point made by the noble Baroness, I can now say that the ABI's analysis has been taken into account in our deliberations. We have also received analysis from the NAPF and Which? What that led us to conclude will, I hope, be apparent very soon.

Lord Oakeshott of Seagrove Bay: I know that the Minister is not teasing us, but if that conclusion is not imminent, it would be very helpful to the House inits consideration of the Bill if the Government's proposal could be announced before Report stage.

Baroness Noakes: Amendment No. 118 groups together some of the things that the Government said in their White Paper about the personal accounts scheme. In this amendment, I am trying to ensure that those things are within the remit of the delivery authority.
	I am sure that it is uncontroversial to specify that investment strategy and execution should be in the best interests of members and that charges will be fair and reasonable, although that covers a multitude of sins.
	One thing that did not find its way into the final list of the remit for the personal accounts system in the White Paper was members having an appropriate degree of choice. However, we know from elsewhere in the Government's White Paper that they believein enabling choice, so I hope that that, too, is uncontroversial. Choice should be part of the personal accounts scheme and therefore part of what the delivery authority takes into account when framing its advice and preparing the scheme for implementation.
	All in all, I do not believe that the amendment goes beyond what the Government have stated are the objectives of the personal accounts scheme and therefore should be the objectives of the delivery authority. I beg to move.

Baroness Gibson of Market Rasen: Amendments Nos. 122A and 122B stand in my name. The references to supporting best practice in terms of shareholder activism and the best interests of members are in line with Principle 6 of the Myners report, Institutional Investment in the United Kingdom: A Review, which was published by the Treasury in 2001. This report sought to provide some basic principles of an effective approach to investment decision-making, in order to promote the long-term health of investments.
	Support for such best practice is also found inthe Institutional Shareholders' Committee statement of principles, The Responsibilities of Institutional Shareholders and Agents. This sets out best practice for institutional shareholders and agents with regard to their responsibilities in respect of investee companies. Members of the ISC include the Association of British Insurers, the Association of Investment Trust Companies, the National Association of Pension Funds and the Investment Management Association.
	Amendment No. 122B aims to ensure that there are some socially responsible ethical funds as options. The wording is based on that of the Pensions Act investment regulations.

Lord McKenzie of Luton: I am grateful to the noble Baroness, Lady Noakes, for tabling AmendmentNo. 118 and to my noble friend Lady Gibson for tabling Amendments Nos. 122A and 122B, which all relate to investment policy for personal accounts.
	I shall deal with Amendments Nos. 118 and 122B first. They are similar in that both would require that the objectives of the scheme in relation to investments and charges are set out in the Bill. The December White Paper, Personal Accounts: ANew Way to Save, set out a broad overview of the personal accounts scheme objectives, investment expectations and charges structures. As we have just discussed, we will shortly be publishing a response to the White Paper consultation. As we have debated on a number of occasions this evening, the delivery authority will initially be supporting the Government by providing advice and recommendations on the commercial and operational impact of options relating to personal accounts. Consideration of investment choices will form part of this advice.
	Amendment No. 122A, tabled by my noble friend Lady Gibson, would place a requirement on the delivery authority to develop an investment strategy based on criteria such as industry best practice relating to corporate social responsibility. As the December White Paper sets out, social, environmental and ethical investment represents a small but growing proportion of total UK investment. Given an apparent consumer demand, the Government envisage that personal accounts will include appropriate SEE choices. However, as the White Paper also sets out, investments based on a strategy of corporate social responsibility may, for example, require more supervision and monitoring, which can make them more expensive. I am sure that, in its development of an investment strategy for the personal accounts scheme, the delivery authority will consider all methods of investments, levels of shareholder engagement and industry best practices. Therefore, I hope that noble Lords will agree that it is not appropriate to commit the authority to follow a specific objective—a commitment that would compromise its consideration of all investment methods.
	Our proposed Bill planned for later this year, subject to the will of Parliament, will provide detail of the personal accounts scheme and give us an opportunity for a full debate. Accordingly, I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Noakes: I thank the Minister. At the end, he said that he did not want the Bill to compromise consideration of all investments. I do not think that either my amendment or that of the noble Baroness, Lady Gibson, seeks in any way to compromise anything. Indeed, both are permissive and simply require certain things to be looked at. I think thatthe Minister got the wrong end of the stick there; otherwise, I accept what he said about the way in which investment will be prepared for. I beg leave to withdraw the amendment.

Baroness Noakes: The two amendments in this group are complementary and address the design of the scheme from the perspective of how well it is operated. Amendment No. 199 has four objectives for the scheme. The first is that the administration of the scheme should be secure, and this links to the requirement in Amendment No. 121 to ensure that the Data Protection Act is complied with. I am sure that the Minister will tell me that the Data Protection Act is not disapplied by the Bill and that therefore the amendment is unnecessary. But the purpose of the amendment is to ensure that the delivery authority designs the personal accounts scheme with the Data Protection Act and, importantly, with the principles in Schedule 1 to that Act firmly in mind, because they are extremely important.
	One other matter listed in Amendment No. 119 is that the scheme should be run economically and efficiently. That sounds obvious but we know that gold-plating has a seductive allure to all those who design systems that they will not themselves pay for. At this stage, there is not even a cost envelope to constrain the well intentioned designers of bells and whistles in the scheme. We need to ensure that the delivery authority—this is for the delivery authority and not for the organisation that ends up runningthe scheme—has value for money written into its remit; otherwise, when it comes to prepare for implementation, it will not necessarily have taken those issues fully on board.
	Lastly, there are two requirements for the scheme: that it should be governed in the best interests of members and beneficiaries; and that managers act impartially, prudently, honestly and responsibly. This might sound like motherhood and apple pie but such things can get overlooked when other objectives seem more important and start to crowd in. I hope that the Minister will welcome the amendments. I beg to move.

Baroness Noakes: I shall also speak to Amendments Nos. 124 and 125. The amendments concern the guidance that the Secretary of State may give to the delivery authority. We have no problem with the Secretary of State doing that because the Government have refused to countenance my earlier amendments that would have set out the objectives of the delivery authority in statute. I believe that the Secretary of State will have to give guidance to the delivery authority to give it some framework to guide its ability to do anything that it likes, as set out in Clause 20(1).
	Subsection (7) says that
	"the Authority must have regard to",
	the guidance, which is getting perilously close to saying that the authority must follow the guidance. In other words, the guidance is a direction clothedin more friendly language. I proposed deleting the subsection on a probing basis to tease out how the Minister expects the guidance to work in practice,and what would happen if the authority, having considered the guidance, decided that it is not appropriate. Let us say that the guidance says, "Don't bother to look at crowding out of other savings products, because the Secretary of State is not too fussed". The authority may think it is an important issue because it has read all the other documents that the Government have published in the past. What will happen if the authority chooses to go in another direction?
	I cite that example as background to my other amendments in this group. It is essential that that guidance given to the authority is developed in the public arena. Amendment No. 124 says:
	"Before issuing guidance ... the Secretary of State shall consult",
	various persons. The amendment lists the kind of persons whose voices should be heard as guidanceis developed in detail. I have also included the Information Commissioner because of the massive amounts of personal data that will inevitably be held by the personal accounts system.
	I also cite examples in support of the need forthe guidance to be made public. Amendment No. 125 asks for the guidance to be laid before Parliament and published. I stress that the amendment requires no parliamentary procedure or delay before guidance becomes effective because I recognise that in certain circumstances that may not be practical. I believe in openness and transparency, and as the Bill stands, the authority has only a sketchy remit set out in statute, and it is important to see the guidance given by the Government. Transparency should be enshrined in the Bill. It should not be left on the basis of the Government choosing what to tell Parliament. I beg to move.

Baroness Morgan of Drefelin: It seems to me that one of the main points of parliamentary scrutiny around the work of the authority will be through the second pension Bill next year, when we will have the opportunity to scrutinise in detail the product of its work. I see that as being a very important outcome of scrutiny for this House and another place.
	In tabling the amendments the noble Baroness has raised some worthy and interesting points concerning the provision for the Secretary of State to issue guidance to the delivery authority about the discharge of its function. The authority will be a non-departmental public body, which during its initial phase will be funded entirely through government grant. As such, I believe that it is right that the Secretary of State is able to issue appropriate guidance from time to time to facilitate a constructive relationship with the authority. However, Amendment No. 123 would mean that the delivery authority could simply disregard any guidance issued under Clause 20(6).
	Clause 20(7), which the amendment seeks to remove, ensures that the authority thinks about such guidance but is not bound by it. The authority will be independent but, as I explained, during the initial stage it will advise the Secretary of State and, in particular, support the Government in understanding the operational and commercial implications of options for personal accounts. It is important that the Secretary of State can be sure that his guidance willat least be considered. By that, I mean that the authority, in "having regard to" guidance, must take it into account, but it is not obliged to follow it. If it does not follow the guidance, it will be obliged to explain why it has not done so.
	I understand the noble Baroness's concerns in tabling Amendment No. 124. In tabling an amendment to specify that guidance issued by the Secretary of State must be subject to such a consultation process, I believe her intention is to ensure that there is ongoing engagement with stakeholders on the development of personal accounts. I hope I can reassure her that we have fostered a consensual approach in developing proposals for personal accounts. We have consulted widely on the proposals, both formally and informally. Indeed, we will shortly be publishing a response to our December White Paper consultation.
	The great number of responses we had to the White Paper is indicative of how successful our consultation has been. We intend that it will continue as we move forward. As my honourable friend James Purnell indicated in Committee in the other place:
	"We will continue to do that, to hold a range of seminars and to consult people widely ... we will continue to be open in our dealings with the authority".—[Official Report, Commons, Pensions Bill Committee, 6/2/07; cols. 311-12.]
	The relationship between the Government and the authority during this initial phase will be based around the provision of advice. We should not mistake it for a formal relationship, such as that which exists between regulators and the Government. An effective relationship, based on dialogue, is clearly crucial in the initial phase and, as I explained, the Secretary of State's ability to issue guidance is undoubtedly a key part of this.
	In the light of that, laying such information before Parliament, as Amendment No. 125 suggests, would appear somewhat heavy-handed. It is not possible to specify what every piece of guidance might cover. Indeed, it is likely that much of the guidance will be issued on an ad hoc basis and will concern administrative or presentational matters—for instance, the format of a report or the presentation of advice. Other guidance issued by the Secretary of State might concern the policy or commercial issues that the authority is being asked to advise upon. Making provision for the Secretary of State to issue guidance enables him to suggest areas where the expertise and knowledge of the delivery authority could be put to best use. Requiring such guidance to be made public, as the noble Baroness seeks to do, may inhibit the provision of free and frank advice. However, we will of course make public such information as is appropriate in accordance with conventions relating to non-departmental public bodies. For example, the management statement and financial memorandum will be published.
	I hope noble Lords will agree that it would not be appropriate to tie down the relationship between the Secretary of State and the authority in the detail that is envisaged in these amendments, although I fully take on board the noble Baroness's comments about the need to be transparent and open in the way that we work. I hope that I have picked up all the points that she made. If not, I will be very happy to remit further.

Baroness Noakes: I thank the Minister for that; I found it quite extraordinary. When others have checked that, we will doubtless be able to return to it. In general, I was not satisfied with the answer stating that guidance will be issued, we will not really know about it until we get the next Bill when we will seethe outcome of that guidance, and that it is not appropriate to tell Parliament because it might be administrative—does that matter?—or might be guidance on the policy or commercial issues that the Secretary of State wants advice on. That is not guidance; it is a simple request for information and does not come under that section. Guidance is doing things or not doing things in a particular way.
	At the end of the Minister's explanation, I am more mystified about how this will work than I was when I started. I thought I could predict some of the responses, but I found some of them pretty bizarre. It is not quite late enough for me to press this issue to a Division, so I shall withdraw the amendment. However, I am pretty certain that I will return to it on Report. I beg leave to withdraw the amendment.

Lord McKenzie of Luton: I presume that the noble Lord was talking to Clause 20 stand part. We have gone through a whole series of amendments. I genuinely believe that most of them were considering detail that we will debate under the next Bill. He asked what information will be made available. The answer is the whole Bill—the whole of the proposals. There will be plenty of opportunity to understand the advice that the delivery authority has given and what that leads to in the framework of the next Bill, and to probe what guidance was given by the Secretary of State and what other information was taken into account.
	I am not sure why the noble Lord is so exercised by this, because the whole process to date has been open, transparent and inclusive. There has been engagement with stakeholders and opposition parties. There is nothing sinister about this, but he has pressed us continually tonight on a range of matters that are the detail that will flow from that advice.
	Specifically on the issue that the authority,
	"may do anything that it thinks appropriate",
	although that may seem quite broad, we must consider the power in its entirety. The clause goes on to describe the parameters within which the authority must work and makes it clear that the authority is limited in its remit. It can advise only on clearly defined proposals about personal accounts. We will return to this in detail at the next stage. There is nothing that we will consider in the next Bill which the noble Lord and his colleagues will not be fully able to probe so as to understand the parametersin which it has been developed, and to challenge or try to amend it, as he and his colleagues do very effectively.

Baroness Noakes: We are sticking with the topic of transparency. The amendment inserts a new clause after Clause 21 which amends the Freedom of Information Act, which will generally be applied to the delivery authority by virtue of Schedule 6. It denies the delivery authority the protection from disclosure afforded by Sections 35 and 36 of that Act. We have no problem with the principle behind Sections 35 and 36, which have been designed to protect the advice that civil servants give to their Ministers. In practice, we think that these sections have been over-relied on to deny the release of information, but that the Information Commissioner has been doing splendid work when complaints are made. We seek through the amendment to apply the spirit of the Freedom of Information Act to the activities of the delivery authority, so that it is never tempted to deny disclosure because its advice is for Ministers—or, indeed, for the effective conduct of public affairs.
	The delivery authority is set up primarily to provide advice on the new personal accounts system, and it is crucial that all those who are affected by that advice, and their representatives, get access to it quickly and efficiently. I am talking not only about the business organisations that are affected and which I normally talk about, but about trade unions and others who represent consumers, such as Which?.
	The delivery authority is in essence a short-life body, and those who want access to information cannot afford the luxury of an appeals process to the Information Commissioner because it would take a long time and could quite frankly outlive the delivery authority. That authority should be open and transparent. I hope that it will always give information about what it does and that it will never be necessary for an information seeker to seek to use the Act to prise out information, as that would be a failure on the part of the authority. The amendment would not deprive the authority of any of the other exemptions from disclosure—an example is commercial confidentiality, which may well arise if the authority is starting to prepare a tender for systems or other advice—but it would rule out a broad exemption for its main task, which is advice to Ministers.
	In another place, the Minister suggested that the amendment would require the authority to handover its IT passwords, or a person applying for an interview to ask the questions in advance. These ideas are risible, given that our amendment deals only with policy advice and the conduct of public affairs, and I hope that the Minister today will give more sensible reasons for rejecting it—that is, if the Government have not yet seen the light on transparency and are still determined to resist the amendment. I beg to move.

Lord McKenzie of Luton: I thank the noble Baroness for raising this matter. The Freedom of Information Act provides for transparency in the workings of government departments and public bodies. It makes clear the circumstances in which information should be disclosed, and sets a framework for applying appropriate exemptions to the disclosure of information. All information held by a public body can be released to the public unless it is exempt under the Act.
	We have sought in the Bill to add the Personal Accounts Delivery Authority to the list of public bodies covered by the Freedom of Information Act. The authority may therefore, if appropriate, usethe exemption provided in Section 36 of the Act. Providing the authority with the ability to use an exemption is appropriate to its status. As noble Lords will know, part VI of Schedule 1 to the Act has a very extensive list of public bodies and offices, ranging from the National Gallery to the Bank of England, which are covered by the Act, including Section 36. Section 36 is very clear about the basis of any exemption that could be used. An exemption would be applied case by case, giving full consideration to the public interest. Information could be judged to be exempt if its release would prejudice collective responsibility, the free and frank provision of advice, or the effective conduct of public affairs.
	Each case of disclosure depends on the facts. Clearly, we are establishing an independent delivery authority, bringing in expertise and skills to givefull and best advice on proposals about personal accounts. In carrying out this function, the authority could advise government on matters in which there is public interest. Having the authority covered by the Freedom of Information Act strikes a balance, and helps to give confidence to the authority in providing free and frank advice, but also to the public where there is a strong genuine public interest in seeing information. It is therefore right that the authority, like other public bodies, is offered the protection set out in Section 36.
	Of course, any use of the exemptions by the delivery authority would be subject to the usual protections. Any member of the public can appeal to the Information Commissioner if they think that a public authority is abusing the exemptions in the Freedom of Information Act. Moreover, the authority, as a public body covered by the Act, will be required to provide information through a publication scheme. A publication scheme is both a public commitment to make certain information available and a guide to how that information can be obtained.
	Additionally, the Bill makes it clear that the authority will produce an annual report and accounts. These will be public documents that will include details of the authority's work, the issues on which it has advised and the progress that it has made towards delivering its remit. The authority will also be subject to normal NDPB scrutiny and accountability arrangements. For example, a management statement and financial memorandum will be agreed between it and the DWP, providing a clear operating framework. These documents will also be published. A rangeof information will be available, but to deny the authority the protection of Section 36, which every other public body gets, is entirely wrong.
	Section 35 of the Freedom of Information Act relates to the formulation of government policy and applies to information held by government departments where disclosure may harm the deliberative process of policy-making. I understand and respect the intentions behind these amendments. Members of the Committee will know that the development of personal accounts has been shaped by a transparent process of consultation. This approach has fostered support from stakeholders for personal accounts, and I reassure the Committee that we expect this to continue when the delivery authority comes into being. The large response we received to the White Paper consultation demonstrates how successful we have been in this approach, drawing on the views and expertise of stakeholders across government, industry, employer and consumer groups. We are to publish our response to that document.
	Having listened to the noble Baroness trying to say why we should do away with these exemptions to the Freedom of Information Act in these circumstances,I remain unconvinced. As regards specifying circumstances where they might apply, who can say? Certainly, there will be instances where the views of Ministers will be part of the exchange that takes place. Those exchanges may portray differences of views at stages on policy development. Issues about collective responsibility are routinely protected under these exemptions. There will be information provided for the formulation of government policy. It is reasonable that these are protected. It would be wrong to suggest that holding to these exemptions, which is routine in other circumstances, is to cast the delivery authority in a negative light and as not wishing to be open. That is not how it has been developed or formulated. I do not believe that that is how itwill act.

Baroness Noakes: I will also speak to the other four amendments in this group, which all concern Clause 22 and when the winding-up of the authority will occur. Amendments Nos. 131, 133 and 135 insert a new condition for the winding-up ofthe delivery authority. At present, the condition is that, following the abandonment or modification of personal accounts proposals, in the opinion of the Secretary of State it is no longer necessary for the authority to continue. However, our amendmentsadd one circumstance; namely, that the authority considers that it has done its job as specified inClause 20.
	Amendment No. 132 amends Clause 22(1) so that if the condition in subsection (3) is satisfied—namely, that the Secretary of State considers it no longer necessary for the authority to continue to exist—he must start the winding-up. At present, he must do this only after 2008, but if he reaches at any time after the passing of the Bill the conclusion that the authority is no longer needed, why on Earth should he have any option on whether he starts to wind it up?
	Lastly, the Government have said that they intend to introduce personal accounts in 2012. Clause 20 states that the delivery authority will be involved in preparing for the implementation of personal accounts, so the delivery authority cannot need to exist beyond 2012 on any reasonable assumptions. Hence Amendment No. 134 provides that the Secretary of State must start the winding-up process no later than the end of 2012. These last two amendments are predicated on the need to eliminate unwanted quangos as soon as their redundancy is identified, and not leave them cluttering up the public sector. I hope the Government will agree with that. I beg to move.

Amendment, by leave, withdrawn.
	[Amendments Nos. 132 to 136 not moved/]
	Clause 22 agreed to.

Lord Turner of Ecchinswell: This amendment is designed to encourage the Government to take an issue seriously and, indeed, to encourage society more generally, trade unions and all relevant parties to do so. It is in that spirit that I speak in its support. I also speak as someone who believes that salary-related pensions are a sensible part of public sector pay packages and who accepts that there is nothing inherently wrong with some of these being unfunded and therefore paid for out of future taxation. It is essential, however, that the total burden on future taxpayers is seen as reasonable, relative to other demands on tax revenues, that the retirement age terms of the pensions are seen as fair, relative to those facing the rest of society, and that the arrangements are internally fair between different employees within the public sector. On each of those three criteria—cost, fairness relative to the private sector and fairness within the public sector—the deal that the Government reached with the unions in 2005 is inadequate and will need to be revisited at some time. It will be best revisited if there is transparency about the facts.
	On fairness between the public and private sectors, it is vital to recognise that in future the vast majority of private sector employees will be retiring with defined contribution, rather than salary-related, pensions. There are today only about 1.7 million employee members of private sector salary-related schemes that are still open to new members. So evenif no further scheme closures occur, within a few decades far fewer than 10 per cent—possibly as few as 5 per cent—of the private sector workforce will retire with salary-related pensions paid at any defined retirement age. Over 90 per cent of the private sector workforce will therefore be choosing their retirement age in the light of available annuity rates, which at any given age—the annuity rate at 65 or at 68—will fall as longevity rises. They will also be choosing their retirement in the light of a state pension age that will rise to 68 by 2045 and, I predict, still higher in subsequent decades.
	It is therefore likely that average retirement ages in the private sector will increase sharply towards 68 and that we will have significant proportions of peopleby the middle of the century working beyond 68. However, private sector employees working to 68 or even later will observe those civil servants who managed to join their scheme before 1 July 2007 retiring at 60, while even those who join after 2007 will still be retiring, in mid-century, at 65, an age likely by then to be several years below the average age of retirement in the private sector. That will not be perceived as fair, because it is not, and it will be the cause of continual and growing resentment.
	Then there is the question of internal fairness within the public sector. The Government's deal has left completely unchanged the position of those who have already joined the Civil Service, or who get in in the next three weeks—I encourage noble Lords, if they are thinking of applying, to get there quickly, as there are only three weeks left—irrespective of their age, even if they are in their early 20s. Such people will continue to enjoy a final-salary-related scheme and a retirement age of 60, while subsequent new entrants will be switched to a retirement age of 65 and an average-salary scheme. These new arrangements will, on average, be slightly less generous, but for high flyers they will be much less generous. In some cases, that will create a very large and quite unsustainable inequality between people doing exactly the same job.
	A woman presently in the Civil Service who leaves for a number of years, perhaps to have children, but who then rejoins, could find herself at the age of 40 doing the same job for the same cash salary as a man of the same age, but she will have a retirement age of 65 versus 60 and will be on an average-salary scheme instead of a final-salary scheme. As a result, it is quite possible that her total remuneration package—salary and pension combined—could in some cases be worth as much as 10 per cent less than that of the man alongside whom she is working. What will that woman do? She may well try to sue for gender discrimination and, whatever the legal resolution, in fairness, she will have a case. Or she will make absolutely sure that she takes a lengthy leave of absence rather than losing her grandfathered status within the existing scheme. But if she does that, the Government's assumptions about the savings that will result as people migrate from the more generous to the less generous scheme will become unsound.
	I know that what the Government and unions say in response is that this grandfathering of existing members' rights is exactly what the private sector has done. It has closed defined benefit schemes to new members but kept them open with unchanged generosity to existing employees. That is indeed what the private sector has predominantly done, but it is highly regrettable. It is creating, within companies, a two-tier workforce, which I think will be challenged in the private sector, as in the public sector, as discriminatory. The danger of that discrimination is likely to be resolved in many firms by the total closure of the defined benefit scheme, even to existing members. I know companies in which discussionsare taking place about the unsustainability of the discrimination and the fact that it can be resolved only by closing the scheme to new accruals as well as to new members. The fact that the private sector has made unfair decisions that have defended existing employees at the expense of the generality of all employees and of new employees is, frankly, a lousy basis on which to seek to justify the same unfair approach in the public sector.
	Finally, I turn to the cost to taxpayers. During the Pensions Commission's work, there were extensive and robust debates about whether society could afford to devote another 1.5 per cent of GDP to ensure adequate pensions for the 100 per cent of the population who depend, to different degrees, on the basic state pension. At the same time, in the 2004 Long-term Public Finance Report, the Government issued estimates showing that, even after their intended reforms but before the impact of latest life expectancy increases, which we knew were still pending, the cost of unfunded public sector pensions was likely to rise from 1.5 per cent to 2.3 per cent of GDP by 2033. That is an increase of 0.8 per cent of GDP, going to the 10 per cent or so of the population who are members of the unfunded public schemes. The Treasury appeared simply to accept that increase at the time, with none of the legitimate robust challenge that was directed towards the commission's state pension proposals.
	The estimate of 2.3 per cent in 2033 has been revised down, in the latest 2006 Long-term Public Finance Report, to 2 per cent in 2035. That is still a significant increase from today's 1.5 per cent, but less of an increase, despite the fact that we have new and higher life expectancy assumptions. Given that thatis a little surprising, it is worth inquiring how this decreased estimate has resulted. The answer, which is apparent from the Government Actuary's Department's technical paper of 26 January this year, is a crucial and startlingly large change in GAD's assumption about the percentage of public sector employees who leave employment at any given age.
	In the 2004 figures, it was assumed that, between the ages of 35 and 40, about 17 per cent of male employees will leave a public sector scheme of which they were a member aged 35. By the 2006 paper, that assumption had gone up to 29 per cent. This is a crucial change in assumptions. When you follow a grandfathering approach to benefits, leaving unchanged the existing arrangements while introducing new, less generous terms for new employees, you need high staff turnover to get cost savings. The higher the staff turnover, the greater the savings and the more rapidly they are achieved. However, the very fact of grandfathering the existing terms for existing members creates a very big incentive for employees, if they are sensible, to stay put or at least to maintain their formal employment status during extended leaves of absence. Therefore, the Government are assuming much higher staff turnover rates than before while simultaneously putting in place a big disincentive to staff turnover. I am frankly unconvinced that those assumptions are safe.
	I am also not convinced by the second key assumption in GAD's technical paper that the number of public sector workers will stay constant perpetually after 2008. If we had a stable population, that might be a reasonable assumption, but GAD's central forecast for the UK's population, on whichall the other assumptions in the Long-term Public Finance Report build, is that it will grow from60 million today to 69.5 million by 2057, which is an increase of about 16 per cent. If you combine that population forecast with flat public employee numbers, that implies that by mid-century we shall have about 14 per cent fewer policemen per head of population, as well as 14 per cent fewer doctors, teachers and nurses per person to be cared for and taught, which sounds to me like a somewhat unsafe assumption.
	There are strong reasons for believing that the issues of public sector pensions—their fairness relative to the private sector, their internal fairness and their future affordability—have not been subject to the rigorous analysis and open public debate that these issues deserve and to which the state pension proposals have been subject. They should be subject to that analysis and debate; if they are not, my fear is that public sector defined benefit pensions will one day go the way of their private sector equivalents, towards abolition rather than sensible reform. Because I strongly believe that sensible reform would be much better than abolition, I urge the Government to take seriously the spirit of this amendment.

Baroness Turner of Camden: I want only to make a very brief intervention. It seems to me that there would be difficulty with the unions as far as this amendment is concerned, because public sector pensions generally speaking are the result of collective bargaining with the relevant unions. Moreover, for many years unions have traditionally regarded pension provision as deferred pay, and I am sure that there would be opposition to the notionof a special commission designed to look at and, presumably, to report on public sector pensions.
	A lot has been said about the private sector. Of course, it is not so very long ago that the private sector produced very good pensions. We used tobe very proud of our occupational pension arrangements in this country compared with those abroad, because we felt that we had a very good scheme—and many private firms offered very good pension provision. Unfortunately, as we know, for all sorts of reasons that is no longer the situation, but it does not seem to me that this requires a new commission specifically to look at public sector pensions when bargaining with unions has already taken place to produce the situation that we now have. I hope that the Government will not feel that it is appropriate to enter into the kind of arrangements suggested in this amendment.

Lord Fowler: That makes the position worse rather than better. I was hoping that the noble Lord was going to say that he would incorporate the public sector in the general Independent Pensions Commission—that seems the logical thing to do—and to have the public sector and private sector viewed together. I cannot see any reason why we should leave the private sector out of such an examination, rather as the noble Baroness, Lady Turner, said. Although I do not agree, and actually profoundly disagree, with almost everything else she said—she will not be surprised by that—I cannot see any point in having one commission looking at the public sector when we should be looking at the whole range of pensions. Goodness knows, there is enough in that area to be done.
	Regrettably, although I agree with much of what the noble Lord, Lord Oakeshott, said, and with even more of what the noble Lord, Lord Turner, said,I could not possibly support this rather narrow proposal to have a commission looking just at the public sector.

Lord McKenzie of Luton: I thank everyone who participated in the debate. Like the noble Lord, Lord Skelmersdale, I do not believe that there is a need for a commission, but not necessarily for the reasons that he gave. I am not sure that I understood what he meant by taking the bull by the horns and where that would lead us. Perhaps that will be clarified at some stage.
	I make it clear that all major public service pension schemes have been under review since the 2002 pensions Green Paper. As a result of that review, reforms in these schemes are now well under way. These reforms fully ensure the long-term sustainability of the schemes. Agreement on the teachers' pension scheme was reached with the teaching unions in May 2006 on a set of reform proposals, and a new scheme has been operating since January 2007. Cost sharing with employees and capping of employer contribution rates form a part of the scheme's regulatory framework.
	NHS employers expect to implement new arrangements by 2008. As we heard, the Cabinet Office has announced that the new Civil Service scheme will be implemented from July 2007. Reforms in the NHS, teachers and Civil Service pension schemes will also introduce mechanisms that will ensure that any future increases in costs will be shared fairly between employers and employees. In addition, there will be an upper limit on the cost to the taxpayer, should costs increase.
	Reform is also well under way or has been completed in other public service schemes. The local government pension scheme announced a series of reforms in November last year, and new arrangements for that scheme are expected to be in place in 2008. New schemes for the Armed Forces, police officers and firefighters have already been introduced. Establishing an independent commission to report on public sector pension schemes would change the context of negotiations currently under way and in doing so—I think that the noble Lord, Lord Skelmersdale, made this point—could delay the benefits resulting from the reforms. Public sector pension schemes are monitored regularly through built-in mechanisms such as the annual resource accounts as well as scheme valuation reports. These reports are prepared by professional actuaries and are based on long-term assumptions that are reviewed and updated periodically.
	Alongside these reviews the Government annually evaluate the financial sustainability of spending on public service pensions in the long-term public finance report—we heard about that from the noble Lord, Lord Turner—published by the Treasury.The latest report, published in December 2006, and the previous report in 2005 make it clear that the long-term spending on public service pensions is entirely affordable and sustainable. The increase has gone from 1.5 to 2 per cent. I think that the noble Lord, Lord Turner, mentioned that figure. The Government actuary's projections on staff withdrawal rates are well within sensible assumptions.
	The noble Lord, Lord Oakeshott, said that the provision was not affordable. I contest that; I believe that it is. The judges were mentioned, of course, but we should focus on the fact that average public sector pensions are just over £6,000 a year. That is not such huge largesse that people in the public sector can retire to a life of luxury. I very much agree with my noble friend Lady Turner that they are seen as part of deferred pay arrangements. Nobody was shouting how unfair it was when public sector pay was not insignificantly below private sector equivalents and was made up with pension arrangements. We did not hear cries of unfairness and unsustainability in those circumstances.
	The noble Lord, Lord Turner, said that the Government should take these matters seriously. Of course, we should, and we do. As regards what is reasonable, the long-term projections show that we can meet the cost of the revised arrangements that have been entered into. It is right that what has happened to some of the public sector schemes mirrors exactly what has happened in the private sector. You cannot wipe away everything that has gone before and build a system from scratch that you say is equitable from now on in.
	I do not believe that a commission would serveany good purpose. It would hold up the residual negotiations that are still under way. They are serious negotiations, looking not only at the change of the date of pension age of members of those schemes but at cost capping, cost sharing and putting limits onthe extent to which the employer will have to fund future increases. It is the right way to proceed. The Government have focused on it, and we are tackling it. A commission would only muddy the waters and hold things up. There is a risk that it would become a forum in which a rather pejorative debate would take place with attempts to say that public sector employees were not entitled to decent pensions. We should want Government employees, whether they be doctors, nurses, policemen or whatever, to have decent pay arrangements and decent pension arrangements, subject to affordability, and that is the deal under way.

Lord Oakeshott of Seagrove Bay: I thank the noble Lord, Lord Turner, for his support and for his excellent analysis of the problem. I would be absolutely delighted if he were to take up the poisoned chalice again, although I am not expecting him to do so. I particularly enjoyed his remarks about the Treasury's legitimate robust challenge to his proposals. He put in a very robust challenge to its hopelessly optimistic assumptions about public sector leaving rates. We will return to that, and we will no doubt question Ministers in considerable detail about that very optimistic assumption that he has now revealed.
	The answer to other speakers, particularly the noble Baroness, Lady Turner, and the noble Lords, Lord Fowler and Lord Skelmersdale, on why we want to do just this one, if you like—the noble Lord,Lord Fowler, called it narrow, but I would call it focused—is that the rest of the landscape has been done. The main Turner commission was able to look at basically everything apart from public sector pensions, so this is the essential gap. We want to get an independent commission that will have as a substantial part of its work looking at the public affordability of public sector pensions, which we all agree on this side of the Committee is a major problem. I am a realist; because the Conservatives in the other place made a very good case, I thought it was worth stressing what they had said. I look forward to further discussion before Report, and I hope that we can find between us the basis of an independent commission that carries wider support in the Committee than my amendment does. I beg leave to withdraw the amendment.

Lord Oakeshott of Seagrove Bay: In the spirit of what I have just been saying, my preference would be for apurely narrow-focused commission, but if there is a commission that does not range too widely and incorporates as a substantial element of its work the affordability of public sector pensions, we would support that. I look forward to hearing from the other two noble Lords on their amendments in this group. I beg to move.

Lord Howarth of Newport: I will speak to Amendment No. 140. All the amendments in the group point in the same direction. In his winding-up speech at Second Reading, the Minister said:
	"The whole package of reforms is based on the fact that people need clarity and certainty about the future in order to plan and save for retirement. A standing pensions commission would undermine this by creating a vehicle for permanent re-examination of the framework and of policy and would be an unnecessary and expensive quango with little to do in the short to medium term. We will carry out periodic reviews drawing on a range of independent expert advice".—[Official Report, 14/5/07; cols. 89-90.]
	In those words, he somewhat elaborated on the brief dismissal of the proposition in paragraph 2.52 of the White Paper.
	I hope that the Government will think again about their position on this. The future is inevitably unclear and uncertain. Inescapably, changes to policy will have to be made from time to time. If you put pensions policy on autopilot, you will run into turbulence. That will be uncomfortable and, indeed, dangerous. My noble friend wants to continue the pattern of the past, with officials commissioning masses of research, studying the reports of the professional institutes and think tanks and quietly advising Ministers. The difficulty with that arrangement was that it did not work well enough.
	The Pensions Commission stated on page 42 of its final report:
	"British pension policy for decades has been bedevilled by a lack of continuity".
	Some courageous and good decisions were taken,but too many bad decisions were taken or shirked. Governments thought that they had got it right and then found that they had not. Moreover, arcane discussion among professionals and officials leftthe public poorly informed, and the quality of public debate was inadequate. It was too easy for governments to fudge and prevaricate, to take the line of least resistance and to base their policy on comforting assumptions. The noble Lord, Lord Turner of Ecchinswell, provided a recent instance of that in his contribution to the previous debate.
	The reality that the Government must face is that, after the past 30 years, the public do not trust government on pensions; hence the sarcasm in the title of the Parliamentary Ombudsman's report, Trusting in the Pensions Promise. The second reportof the Pensions Commission, under the heading "Securing long-term sustainability and consensus", stated:
	"The effectiveness of the UK's present pension system, both state and private, is undermined by low levels of understanding and trust. Many people do not understand what the state pension system will deliver: many do not believe that the present state promise will be maintained and many do not trust the financial services industry to sell good value products".
	The report added:
	"These problems have arisen because of: Multiple past changes to the state pensions system ... which aimed to reduce the generosity of future promises but in a non-transparent fashion ... The failure to explain openly the challenges and implications of changing demography ... People intuitively grasp that the state is going to do less for them, but neither understand nor trust the precise plan ...The mis-selling scandals of the 1990s, which in return reflected a misguided attempt to extend personal pensions to segments of the market where the economics only appeared to work in periods of exceptional capital return".
	So policies of hugger-mugger and ad hoc-ery will not do. If we are to build trust, we will need openness and independence.
	The Pensions Commission has been a successand has started to construct public confidence. The facts and the issues were plainly laid out by the commission, commentators and the public have become seriously interested, and the quality of the analysis and the good sense of the recommendations have helped us move towards consensus. That has made it possible for the Government to grasp nettles and take far-sighted decisions. We should continue with this successful model.
	We should have a standing pensions commission. Its role would be to keep the evidence under systematic review and to publish the evidence at sensible intervals, with thoughts as to its implications. That would regularly renew responsible public engagement, reassure a sceptical public to the extent that they found that policy was set fair and prepare the public and the political system in good time for modifications of policy, as and when the need for that became evident. Such reviews would be helpful to all of us intellectually and could only be of help to the Government politically. They would be analogous to the quarterly inflation reports produced by the Bank of England.
	Far from being, in the words of my noble friend the Minister,
	"an unnecessary and expensive quango",
	a standing pensions commission is a necessary means to create trust and would be very good value for money. To decry such a body as a quango is not an argument but a rhetorical tactic. Indeed, quangos and boards of trustees are means of enlisting very able and well qualified people of the calibre of the noble Lord, Lord Turner of Ecchinswell, Professor Hills and Ms Drake to serve the public interest at a very modest cost.
	Whatever the cost of the Pensions Commission so far—perhaps the Minister will tell us what the figure is—the cost of getting policy wrong, as has happened so often in the past, will be incomparably greater. What was the cost to public expenditure, the pensions industry, the economy and, most important, tosavers of the twists, turns, contrivances and errors of policy of past years? There were the costs of the mis-selling of Maxwell, the leaflets, the collapse of ASW and other schemes and of the financial assistance scheme, compounded by the recommendations of the ombudsman and the ruling of the court. There was also the implosion of defined benefits schemes, the collapse of Equitable Life and people being forced back on to social security. What have been the costsof a system so complicated that people could not understand it and failed to save enough? What have been the costs of a system whereby, until pension credit, the poor were penalised through the benefits system for their savings, while the rich were rewarded for theirs at the expense of the Exchequer via tax relief?
	Do not let us stumble on like that in future decades. If we had had a standing pensions commission 30 years ago, vast amounts of money and misery would have been saved. If we had a standing pensions commission in the next 30 years, it would be a very worthwhile investment. It would routinely assemble and publish information on the relevant issues for both the public and the private pension sectors—the whole array—as I believe is right.
	What would be the key issues and the terms of reference? I shall not go into detail. The final report of the Pensions Commission of the noble Lord, Lord Turner, made one set of suggestions—at figure 18 on page 43—and in several appendices in his second report the noble Lord spelt out the data requirements. The White Paper suggests, at paragraph 340, what the recurring topics might be for its private reviews. The NAPF, in supporting the thrust of the amendments, has suggested simple terms of reference to monitor the adequacy and sustainability of the pensions system. Amendment No. 140 offers some suggestions; Amendment No. 142 in the name of the noble Lord, Lord Fowler, which seems to me to be similar in purport, offers a variant. That can be debated, but the range of data and issues that we would expect a pensions commission to keep under review is evident.
	The regular publication of such reports, together with the requirement that the Government should publish their response, would, I believe, produce immense benefits. It would promote public understanding and responsible attitudes, and it would help to engage the Government as a whole—the Treasury, the DTI and, indeed, the DfES and the Department of Health, alongside the DWP—in a fuller, more intelligent and more coherent response. The policy on pensions is not just relevant to security in retirement but crucial for the health of the financial markets and for the investment that should create prosperity for everyone throughout life. The reports would make it much harder for the Government to prevaricate, and they would improve public confidence in pensions. I believe that if we had a standing pensions commission in the future, we would then be likely, instead of unlikely, to have coherent, timely and far-sighted policy for pensions.

Lord Fowler: I strongly agree with what the noble Lord, Lord Howarth, has just said. I speak to Amendment No. 142 but it is very similar in intent to Amendment No. 140. I want to take up one point that the noble Lord made: the Government should understand that it is entirely in their interests that they do this. It is not just in the interests of the public but very much in the interests of the Government—and I say to my own Front Bench, any Government—to support this kind of amendment.
	There are three models of a pensions commission in the showroom at present and a fourth has been driven up by the National Association of Pension Funds, which, in principle, supports the proposal that we are putting forward. There is the model of the noble Lord, Lord Oakeshott, which he spoke about briefly but which, frankly, is a bit of an old banger in that it self-evidently has some parts missing. That is because, so far as I can see, the noble Lord believes in building several models rather than just one and the result is that the vehicle is not complete. Then there are the two models suggested by the noble Lord, Lord Howarth, and me. I say without fear of serious contradiction that these are much superior in that both have engines, which is normally regarded as important in car building, and allow the commission to look at all the issues regarding pensions.
	Frankly, I do not mind which of the amendments is taken and accepted by the Government—which I know they will. I joke, of course, as I know that they will not. We have both self-evidently gone to the Turner report for our inspiration. I should point out that the National Association of Pension Funds, which has come out in favour of our proposals, has supported my proposal for triennial reviews, so perhaps I get my nose ahead a wee bit on that. As the Turner report makes clear, there are important reasons for keeping this area under independent review. It is on that point that I am very serious.
	I have two reasons for that. First, many of the errors surrounding pensions legislation occur not because the legislation has not been reviewed as it goes through Parliament. Often it has been reviewed very thoroughly indeed; committees have done their work and Ministers have given their undertakings. The fact is that that work and those undertakings have simply not been observed. That is the fact of the matter. I remember a case of my own, to which the noble Lord referred in passing, when my Minister of State—not unknown—one John Major, gave the clearest undertaking that publicity would be given to a particular change. No publicity was given. We had long since left the department at that time. I went back to see the Permanent Secretary of what was then the Department of Social Security, whose first words were, "The fault is entirely down to this department and the Civil Service". As it happened, Ministers, as is their right, took responsibility, but the position was that no papers ever went to the Ministers involved. The fault lay with a number of civil servants who had been charged to put the policy into effect and had not done so.
	Errors occur among Ministers and civil servants, so how can that be avoided? It is not too difficult, I would suggest. You have post-legislative scrutiny and a process by which somebody goes through the legislation not to agree or disagree with it, but simply to check that its intention has been and is being put into effect. If you did that, you would avoid a number of mistakes that have been made over the past 10,20 or 30 years.
	Secondly, this is perhaps the most cost-effective measure in this legislation. It would avoid mistakes that could cost literally millions of pounds to put right. This Government know all about that; my Government—if I can put it that way—know all about it as well. I cannot imagine that anyone would be foolish enough to argue that this will cost too much. It would be one of the best investments that the Government have made as it would prevent loss of money and errors taking occurring.
	In addition to what I would describe as post-legislative scrutiny, the commission has other important duties such as looking at the latest trends in private pension spending and considering the affordability of public sector pensions. That is why I think it is so important to the noble Lord, Lord Oakeshott, that one somehow finds a means whereby one can put under the same umbrella the numberof very important issues that need to be kept under review in pensions. It would be a mistake if we were simply to include one of those issues, and we would not carry the House. However, if we were to include a number of them, there would be more prospect of doing so. In addition, the ability to examine the issues that are considered urgent, which is paragraph (e) in my amendment, would certainly include the progress of legislation that has recently been past.
	It is 9.30 pm on Monday evening, and this is not the most overcrowded House I have seen. It is probably inappropriate to have a vote at this stage, but I sincerely say to the Minister that this is one of the most important amendments in this process. He has his instructions, and, doubtless, they will be given to us, but I say to him, for repetition to whoever gives him his instructions, that if the Government reject this, they will live to regret it. That is certain. The Government would be extraordinarily unwise to reject a sensible proposal that will not cost a vast amount of money but will preserve the interests of the present Government and any other Government who come after them.

Lord McKenzie of Luton: This has been an interesting debate. Perhaps I should start by wishing my noble friend Lord Howarth a very happy birthday—if my Guardian reading is correct. I hope that he will not mind if I do not wish him many happy returns on one particular of his amendment; but, subject only to that, I hope that he has a good day.
	The debate has given us the opportunity to debate an issue of some importance. It allows me once again to pay tribute to the noble Lord, Lord Turner, and his work on the Pensions Commission. We are indebted to him and his colleagues, whose authoritative analysis of the challenges confronting our pension system has provided the foundation for broad consensus on the way forward. In particular, it has paved the way for the difficult decision to increase the state pension age as the necessary trade-off for the restoration of the links to earnings.
	My noble friend Lady Hollis reminded us at Second Reading that several of my predecessors have promised enduring pension settlements, only to see their reforms overhauled a few years later. I do not claim that, once these two Bills have made it to the statute book, we can hang up our pension hatsfor good, but I believe that these proposals, which substantially implement the recommendations of the Pensions Commission, set a course that will stand the test of time.
	The Pensions Commission was set up to undertake a specific task. That job is now done. However, noble Lords seem to be proposing the setting-up of a permanent body to keep the settlement under perpetual review. The advocates of that proposal are, in essence, saying that that is needed because no one trusts the Government. My noble friend Lord Howarth made that point specifically.
	In my view, the creation of such a body at the very point when the first of these measures is implemented would undermine confidence in the reforms. I think that the noble Lord, Lord Skelmersdale, was edging towards that conclusion. What people want is clarity and certainty about the future, to plan and save for retirement. I can only restate our agreement with the rationale behind the amendments and repeat that any disagreement rests solely on the question of how best those shared aims can be achieved.
	First, there is the question of transparency. No one should doubt our commitment to full and open consultation and debate on the efficacy of our policy. We have demonstrated that during the passage of the Bill. The DWP and the Office for National Statistics already regularly publish a wide range of statistics on pensioner incomes, savings, life expectancy and demography. In addition, the DWP publishes a large number of research reports each year, so a wide range of data is available to external researchers who want to probe further.
	We agree that the evidence on which we based our reforms will need to be kept under review. We have already set in train a programme of work to develop an evidence base, in consultation with a range of stakeholders, which could underpin future evaluation of our reforms. The first of three workshops took place last week, involving academics and pensions experts. The second, planned for this week, will involve representatives from key stakeholder organisations. We have also invited opposition spokesmen and the chairman of the Work and Pensions Select Committee. The final workshop, also this week, will involve analysts from a number of government departments.
	Following that consultation, we will publish a strategy document later this year on how we propose to build and maintain a credible evidence base, which will support future policy considerations across a range of issues. That will ensure that policies are kept under review in the light of sound evidence. We are committed to keeping our pensions policies under review; let me be clear about that. I do not think it controversial to assume that any future Government would do the same. We are debating method, not principle.
	Let me say something about some of thespecific suggestions for the work of an independent commission. The amendment proposes the annual publication of gender, carer and state pension coverage impact assessments. The Government's commitment to addressing gender issues has been integral to our development of pension reform. In November 2005, the DWP published a report on women and pensions that analysed women's pension position and the major influences on women's retirement incomes. This was part of the evidence used to develop proposals for pension reform, in which fair outcomes for women and carers were a key objective. More recently, as we discussed earlier, we published a detailed gender analysis of the measures in the Bill, and we plan to undertake gender analysis to accompany further legislation on personal accounts.
	The noble Lord, Lord Oakeshott, also proposes the production of information on possible withdrawal rates. This would not provide any meaningful information on which people can base their financial decisions. Individual circumstances will vary, and projections will depend on a number of variablesand assumptions. We already regularly produce comprehensive pension credit data, and will continue to do so for operational and planning purposes. I therefore conclude that the independent commission proposed in the amendments is not necessary to achieve transparency for the future review of pensions policy and the evidence that should inform it.
	On the need to maintain consensus, we decided not to institute a permanent pensions commission precisely to avoid destabilising the consensus that has so recently been achieved. As we have said, our preferred approach is to carry out periodic reviews of the impact of the reforms, drawing on independent advice and based on robust evidence. This approach has the added merit of leaving it to future Administrations to decide exactly what should be reviewed in the future and when it should be reviewed. So although I share the noble Lords' concerns, the amendments are unnecessary for achieving the transparency that we all seek in these important matters, and I urge them not to press them.

Lord Oakeshott of Seagrove Bay: I tabled the amendment to put down a marker to stress our view that the existing tax relief on pensions is unfair, regressive and too skewed towards higher earners. The simple fact is that over half of tax relief goes to top-rate taxpayers, and about another 15 per cent goes to people who would be top-rate taxpayers were it not for this tax relief. That means that almost two-thirds of tax relief on pension saving goes to people who are better off.
	In our debate on the previous amendment, the Minister said that pensions outcomes for womenwere unfair. I welcome the interest that the Equal Opportunities Commission has shown in my amendment, and make its point that tax relief is unfair to women because they do not make up nearly such a large share of high earners as men. Four-fifths of tax relief at the top rate goes to men, which is a good deal more than their share of the labour force.
	I do not propose to press the point further, except to say that tax relief on pension contributions is going up quite quickly: it was £15 billion in 2005-06, and latest estimates are approaching £18 billion. That is happening particularly because under the new rules, on SIPPS in particular, quite a lot of better-off people are taking the opportunity to put in substantial sums—more than £200,000 a year—which again is proving to be quite a substantial tax break. One always has to remember that people get tax relief at the top rate and are able to take back 25 per cent of the money, often quite quickly, as a tax-free lump sum. We also believe that it is unfair because quite a number of people get top-rate tax relief when they make their pension contributions, but they pay only standard rate tax when they draw their pension in retirement. In that sense it is unfair as well. I beg to move.

Lord Howarth of Newport: It would be very helpful to have a report such as the noble Lord has proposed, because it might help to focus our attention on two issues. He has already sketched the first issue; namely, the extraordinary disproportion in how tax relief favours the wealthiest in society. I do not know exactly what the figures are, although I suggested at Second Reading, based on briefing that I had read, that 5 per cent to 10 per cent of the wealthiest individuals in the country enjoyed a benefit of 50 per cent of available tax relief. If the totality of that tax relief is creeping up towards £18 billion, this Labour Government are pumping £9 billion a year of tax relief towards the best-off people, which seems a very odd policy for a Labour Government to pursue.
	I know that the noble Lord, Lord Turner of Ecchinswell, in the Pension Commission's report explained that so long as defined-benefit schemes loom large in the pensions firmament, there are significant technical problems about doing anything very much about this. Since we see that defined-benefit schemes are looming smaller and smaller, day by day, I hope that the day will not be long distant when the Government will feel able to address themselves to this. If we were to replace tax relief with a system of grants, it would be possible for the Government to exercise flexibility and to target incentives to save at people on much more modest incomes, which would surely be desirable, less wasteful and more just.
	The other issue that such a report might highlight would be that which my noble friend was talking about in a debate at the beginning of these Committee proceedings when he replied to an amendment proposed by my noble friend Lady Hollis. The amendment proposed that people should be enabled to buy up to nine extra years on their basic state pension at a late stage in their working life. As far as I could understand what my noble friend was saying, he explained that the Government had difficulties about this because of cash flow. They did not find it unacceptable to forego those pension contributions much earlier in the individual's working history and said that it would not be right for people to be able to bunch their contributions towards the end of their working lives. This treatment of pension opportunity for people on very modest earnings seems strikingly at odds with the Government's treatment of people on high earnings. The Government seem to be entirely happy that people wishing to make very large contributions in the late stages of their working lives to private pension schemes should be able to do so to secure tax relief at 40 per cent.
	Their commitment is fiscally quite open-ended. While there are very generous outside limits on what an individual can contribute—the amounts are massive—there is no limit on the number of people who may be eligible to do that. It depends on who comes along and wants to do so. I would be grateful if my noble friend could offer any reflections on that in his concluding remarks. It is one more illustration of how independent reports from time to time can help to get us all focused and anchored to formulate the issues with which we ought to be concerned, and precipitate us into doing something about them.

Lord Skelmersdale: We have already debated the unfortunate effect that the current system of pension credit is having on a growing proportion of the public, so what worries me about this amendment is proposed paragraph (d) because it looks towards more means-testing and seems entirely the wrong way forward. A few moments ago I described myself as an unpaid cynic, and I am going to be cynical now. I wonder whether the noble Lord, Lord Oakeshott, has tabled this amendment to check up on his party's interesting new tax policy of a single basic rate of income tax achieved by abolishing the tax relief on pension contributions on higher earnings, and how that will affect pensions. Rather like the Chancellor, the Liberal Democrats have already been told, though unlike the Chancellor they admit that the benefits of saving linked to a pension for high-rate taxpayers will be reduced. The one thing that has been crystal clear in our discussions on the Bill is that it is all about increasing savings towards retirement, not reducing them. As I understand it, that is exactly what this amendment would do, and I cannot support it on that basis.

Lord McKenzie of Luton: I thank the noble Lord, Lord Oakeshott, for raising the issue of pensions tax relief, which is always an interesting subject. It was raised in Committee in another place, and as my honourable friend the Minister of State for Pension Reform said, it is a matter for the Chancellor of the Exchequer. Furthermore, the tax structures in this country are matters for the other place not your Lordships' House.
	Noble Lords know that the Government already publish estimates of the annual cost of tax relief on private pensions. The Treasury publishes alongside the annual Pre-Budget Report a tax ready-reckoner that provides an estimate of the recorded costs of pension tax relief. It also publishes a table of the estimated costs of the major structural tax relief alongside the Budget. Producing a five-year projection of the annual cost of tax relief on pension savings would require firm assumptions about both tax policy and future savings behaviour, including any changes in savings behaviour, and it would prejudge key annual Budget decisions on tax thresholds and rates. Whoever the Government of the day, such decisions are rightly a matter for the Chancellorof the Exchequer. This amendment would create unnecessary duplication across Whitehall.
	I can understand the noble Lord's wish to evaluate the current system. He will know that the Pensions Commission considered this issue and did not recommend changes to the overall system of tax relief. The commission felt that to do so would create huge implementation complexities, and it wouldbe extremely difficult to get rid of any existing inequalities without introducing other new ones. Providing estimates of the cost of tax relief on contributions to approved pension funds by decile and income band would require better information on the income distribution of those contributing to occupational schemes. Such analysis cannot therefore be sufficiently robust to provide detailed distributional information on pension relief.
	I should stress that tax reform has already taken place. I hesitate to mention the "A" word because I know that the noble Lord, Lord Skelmersdale, will chastise me for doing so, but April 2006 witnessed the introduction of a radically simplified tax regime for registered pension schemes. These reforms have resulted in a pensions landscape where individual pension schemes can tailor their benefit packages to suit their sponsors and members, and members will be able to save as much as they wish, when they wish, in order to provide a secure income for themselves in retirement. The pensions industry has broadly welcomed these changes, and I suspect it would be alarmed if further changes were made before the improvements introduced last year had adequately bedded down. I share the aspirations to encourage people to save for a secure retirement, and that is why the Government provide generous tax incentives. The figure that I have for the total value of tax relief for 2006-07 is £16.3 billion. We could have a huge and interesting debate on this, but frankly, at this time of night, that would be difficult. The key point is that it is not appropriate to call for this report. The data would duplicate much of what else is in the system.
	My noble friend Lord Howarth challenged me on why we allow the current structure of income tax relief for pension contributions. He said that it was inconsistent with our approach for national insurance contributions. The two are not the same: one is dealing with the contributory principle encouraging people to pay as they go along. Tax relief has a different structure which seeks to encourage savings. However, we agree that it is important to ensure that individuals are in a position to make informed choices about working and saving for their retirement. On that, we share common ground with other noble Lords and these measures are likely to have a greater effect on those not saving and not working long enough than reform of the tax incentive structure would have. I therefore urge noble Lords to withdraw the amendment.

Baroness Morgan of Drefelin: I am delightedthat my noble friend feels that she can withdrawthe amendment because TPAS has received the reassurances that it was looking for in another place. We reiterate the assurances already given.

Lord McKenzie of Luton: moved AmendmentNo. 144:
	Clause 23, page 25, line 18, at end insert—
	"(3) Before the Secretary of State makes any regulations by virtue of—
	(a) section 15(6), or(b) section 18(9),he must consult such persons as he considers appropriate.
	(4) Subsection (3) does not apply—
	(a) to regulations made for the purpose only of consolidating other regulations revoked by them,(b) in a case where it appears to the Secretary of State that by reason of urgency consultation is inexpedient,(c) to regulations made before the end of the period of6 months beginning with the coming into force of the provision mentioned in subsection (3) by virtue of which the regulations are made, or(d) to regulations which—(i) state that they are consequential upon a specified enactment, and(ii) are made before the end of the period of 6 months beginning with the coming into force of that enactment.
	(5) In subsection (4) "enactment" includes an enactment comprised in subordinate legislation."

Lord McKenzie of Luton: moved AmendmentsNos. 145 to 164:
	Schedule 7, page 69, line 17, column 2, leave out "Section" and insert "Sections 32(2) and"
	Schedule 7, page 69, line 38, column 2, at end insert—
	
		
			  "Sections 28 to 29." 
		
	
	Schedule 7, page 70, line 19, column 2, leave out "136(4)" and insert "136(2) and (4)"
	Schedule 7, page 70, line 20, column 2, at end insert—
	
		
			  "Sections 142 to 146." 
		
	
	Schedule 7, page 70, line 22, column 2, at end insert "and paragraphs 34 and 35"
	Schedule 7, page 70, line 22, column 2, at end insert "and paragraph 37(a)"
	Schedule 7, page 70, line 22, at end insert—
	
		
			 "Social Security Act 1998 (c.14) In Schedule 7, paragraph 126." 
		
	
	Schedule 7, page 70, line 23, column 2, after "paragraphs" insert "33,"
	Schedule 7, page 70, line 23, column 2, after "35(3)" insert ", 41"
	Schedule 7, page 70, line 27, column 2, at end insert—
	
		
			  "In Schedule 2, paragraph 5 (and the cross heading immediately preceding it)." 
		
	
	Schedule 7, page 70, line 27, column 2, at end insert—
	
		
			  "In Schedule 5 in paragraph 7(6), in the definition of "contracted-out rights"— 
			  (a) in paragraph (a), "or (3)"; 
			  (b) the "or" following paragraph (a)." 
		
	
	Schedule 7, page 70, line 27, at end insert—
	
		
			 "Child Support, Pensions and Social Security Act 2000 (c. 19) In Schedule 5, paragraphs 2(2) and 3(2). 
			 Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 (S.I. 2001/3649) Articles 117 and 118." 
		
	
	Schedule 7, page 70, line 28, column 2, at end insert—
	
		
			  "Section 284(3) to (7)." 
		
	
	Schedule 7, page 70, line 29, column 2, at end insert"and (5)"
	Schedule 7, page 70, line 29, at end insert—
	
		
			 "Civil Partnership (Contracted-out Occupational and Appropriate Personal Pension Schemes) (Surviving Civil Partners) Order 2005 (S.I. 2005/2050) In Schedule 1, paragraphs 9 to 11. 
			 Taxation of Pension Schemes (Consequential Amendments) Order 2006 (S.I. 2006/745) Article 7(3) and (4)." 
		
	
	Schedule 7, page 70, line 43, column 2, at end insert—
	
		
			  "In section 20(3), "and 43 to 45". 
			  Section 31." 
		
	
	Schedule 7, page 71, line 18, column 2, at end insert—
	
		
			  in sub-paragraph (5), the definition of "appropriate flat-rate percentage."" 
		
	
	Schedule 7, page 71, line 19, column 2, leave out "and (6)" and insert ", (6) and (7)"
	Schedule 7, page 71, line 22, column 2, after "paragraphs" insert "36,"
	Schedule 7, page 71, line 24, column 2, after "34(b)," insert "43,"
	On Question, amendments agreed to.
	[Amendment No. 165 not moved.]

Lord McKenzie of Luton: This clause provides that any Order in Council made for Northern Ireland at paragraph 1(1) of the Schedule to the Northern Ireland Act 2000 making provision correspondingto those in the Bill would not be subject to the affirmative procedure of parliamentary scrutiny, but would instead be subject to the negative procedure. The clause also provides that the Order in Council would be annulled should the Assembly be restored.
	As is the convention, the intention was that an Order in Council would replicate the provisions of the Pensions Bill for Northern Ireland and maintain the long-standing policy of parity in this area, while maintaining the integrity of the separate Northern Ireland body of law in this field. However, because the Northern Ireland Assembly is now up and running, a provision corresponding to the Bill extending to Northern Ireland reverts to being a matter for the Northern Ireland Executive and the Assembly. The Assembly will therefore enact the legislation corresponding to the Bill after Royal Assent, in accordance with the normal processes governing Orders in Council made under the Northern Ireland Act 2000. Accordingly, I oppose the Question that Clause 27 stand part of the Bill.

Lord Skelmersdale: Although I quite understand why these amendments are necessary, due to recent welcome developments in Northern Ireland, I hope that the Minister will be able to clarify a question to which I ought to know the answer: why do the Government think it necessary to devolve these powers to the Northern Ireland Assembly when they are reserved matters with regard to Scotland and Wales?
	While I am on my feet, I note that there is no longer any provision on the statute book in the event—unlikely, I hope—of Stormont and devolved government in Northern Ireland breaking down again. Can I be assured that in that event the DWP legislation, particularly pensions legislation, would be swept up in a suitable Northern Ireland Act, of which we have seen so many over recent years?
	Since this is the last occasion on which either of us will speak, I thank the Minister for his good temper and his courtesy throughout our debates on the Bill.I have not always agreed with him, but very occasionally he has even agreed with me, which is always welcome.

Lord McKenzie of Luton: The answer to the noble Lord's question about what would happen if the Assembly did not continue is that there would need to be provision to ensure that the legislation was covered in another way. I shall write to the noble Lord in more detail on that point. I should also say that thereare some government amendments here. They are tidying-up references to Clauses 27 and 28 that are no longer needed.

Lord McKenzie of Luton: moved AmendmentsNos. 167 and 168:
	Clause 28, page 26, line 38, leave out "other thansection 27"
	Clause 28, page 26, line 39, leave out subsection (2) and insert—
	"(2) Section 8 and the repeal in the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) in Part 3 of Schedule 7 extend to Northern Ireland only."
	On Question, amendments agreed to.
	[Amendment No. 169 not moved.]

Clauses 29 and 30 agreed to.
	House resumed: Bill reported with amendments.
	House adjourned at 10.06 pm.
	Correction
	A chunk of text appeared in the wrong place inthe Official Report of the Second Reading of the European Union (Implications of Withdrawal) Bill on Friday 8 June. In col. 1426, immediately after the time 3.29 pm, the next two short paragraphs (from "the total administrative burden ..." to "... when he winds up.") are not part of Lord Vinson's speech. They should appear in Lord Stoddart of Swindon's speech, at the end of the second full paragraph ofcol. 1427 (after "That stated:").